The attorney who took part in most of Regina Preetorius’ real estate transactions testified Friday as the first defense witness in her federal trial in Augusta.
Preetorius has pleaded not guilty to 14 counts of wire and mail fraud and three counts of money laundering.
Columbia County attorney Susan Reimer spent most of the day providing testimony that supported Preetorius’ defense: that she was caught in a “perfect storm” of banking and real estate crashes in late 2007.
“We were powerless to do anything about it,” Reimer said of the crisis that led to the demise of Preetorius’ business, SDA & Associates, and the financial devastation of investors, homeowners and renters.
Reimer said Preetorius made it very clear to investors that their money would be given in exchange for a lien on a particular property.
Contrary to what numerous investors testified to this week, Reimer said the money was never intended to be used just on that property. Their investment money was like an equity loan – it has no restrictions on its use, she said.
Also contrary to investors’ testimony, Reimer said each investor would be consulted before the collateral securing their investment was moved from one property to another.
On cross-examination, Reimer said she didn’t know how the investment money was spent, or that new investors’ money was used to pay old investors’ interest payments.
Reimer blamed the passage of time for forgetting that she wrote an open letter of support and endorsement for Preetorius and her business, and forgetting that she helped Preetorius draft letters to investors that prosecutors contend were meant to placate unhappy and nervous investors in 2007 and 2008.
The last letter, in April 2008, which she admitted to reviewing after being confronted with e-mails, was really a letter telling investors that Preetorius was broke but wanted to try to find a way to pay everyone back, Reimer testified.
Confronted with another e-mail to Preetorius after an upset investor came to her office demanding his money – an investor who lost $98,000 – Reimer reaffirmed her belief that the April 2008 letter was an attempt to give investors honest information.
“Your letter might slow him down a bit,” Reimer told Preetorius in the e-mail sent after the investor’s visit to her law office.
Reimer said she didn’t know Nadine Frances had rescinded Preetorius’ power of attorney two days before Reimer and her husband signed off as attorneys on a quit claim deed Aug. 22, 2007, that gave SDA ownership of Frances’ property and a security deed to a private investor the same day.
If Preetorius knew the power of attorney had been revoked, then they had no legal authority to perform the transactions, Reimer said.
Reimer said she did many closings for SDA and was paid for each, but that her testimony wasn’t in support of one side or the other at the trial. Reimer said she had been subpoenaed by both sides and as an officer of the court was testifying truthfully about what she knew.
Her reputation, Reimer said, was in God’s hands and not tied to the outcome of Preetorius’ trial.
The trial in U.S. District Court continues Monday at 9 a.m., with Preetorius on the witness stand.