David R. Sparks, Smooth-Talking GOP Liar and Real Estate Broker, Convicted of $4.3 Million Ponzi Scheme
Today was not a beautiful day in the neighborhood for Sparks, however, as he became known as something else: a convicted felon.
The Orange County Register's Brian Martinez, who has been tracking the Sparks saga since March, reports today that documents filed this week at the federal courthouse in Santa Ana show 50-year-old Sparks signed a deal with the U.S. Attorney confessing to having claimed to investors that he bought, rehabbed and sold foreclosed homes he never actually purchased.
Under the terms of the plea agreement, Sparks copped to felony interstate wire fraud, and the U.S. Attorney will ask the judge for a sentence on the lower end of the 20-year maximum term in the federal pen for that crime. The judge is under no obligation to impose a shorter sentence, however. Sparks has also agreed to pay $4.3 million in restitution.
|Irvine City Councilman Steven Choi chose David R. Sparks for the Planning Commission because of real estate broker's GOP bonafides.|
But by 2007, rents from the properties could not support the debt, so Sparks sought cash from more investors. He lied to them that they were investing in new properties, but he was actually using the funds to cover his old debts. Sparks tried to cover his tracks by forging bank documents, using non-existent escrow companies, providing phony status updates and falsely reporting profits. When investors tried to pull their money out of what was actually a Ponzi scheme, Sparks came up with lies to explain why he could not cash them out.
Martinez reports that the plea deal Sparks signed had him admitting to having taken in about $4.8 million under the false pretenses, spending about $500,000 on "lulling payments" to the investors and about $4.3 million on his debt. Despite the restitution and government-ordered liquidation of Sparks' assets, he still faces civil lawsuits from those investors. Two have already been filed.
Irvine City Councilman Steven Choi, explaining he wanted to shake up the Planning Commission, removed Probolsky and appointed Sparks as his replacement in December 2008. Choi tells Martinez he first met Sparks through the councilman's learning center business. Choi was impressed by Sparks' Orange County GOP bonafides. Recent election records show Sparks contributed to the 2010 campaigns of GOP assemblymen Don Wagner of Irvine and Allan Mansoor of Costa Mesa.
The FBI began investigating Sparks in late January. Sparks resigned from the Planning Commission the following month, telling Choi it was due to personal business matters.