Editor's Note: An earlier version of this story did not have the correct title for Assistant U.S. Attorney Christopher Troy Clark.
Regina Preetorius can no longer hide behind a failed business venture. What she did was criminal, a federal court jury determined Tuesday.
The jury deliberated for more than seven hours before convicting Preetorius of 10 counts of wire and mail fraud and three counts of money laundering. The jury acquitted Preetorius of four counts of mail and wire fraud.
Following the verdict, U.S. District Court Judge J. Randal Hall ordered that Preetorius be held in custody pending sentencing. She faces a sentencing range of around 15 years.
“She fought to keep it covered up as long as she could,” Assistant U.S. Attorney David Stewart said of Preetorius in his closing statement. If Preetorius was devastated by the collapse of her business and the financial ruin in her wake, it was because she got caught, he said.
Preetorius used her company, SDA & Associates, to obtain the properties of financially distressed homeowners – promising to keep the homes from failing into foreclosure and selling them to other people under rent-to-own contacts. She convinced others to invest in her company by promising 12 percent interest on investments with guaranteed safety.
“The defendant lied, she cheated and she stole,” said Assistant U.S. Attorney Christopher Troy Clark.
Preetorius used the SDA investments, down payments and rents, and properties as her personal piggy bank, Clark argued. And she continued taking money from others when she knew financial institutions would foreclose on the properties because she wasn’t making the mortgage payments as she promised, Clark said.
And though she stopped paying the mortgages, she made the monthly payments on her Mercedes Benz, paid for visits to nail and hair salons, paid for dog grooming and paid thousands to herself while investors, homeowners and renters were unknowingly poised to lose millions of dollars in property and cash.
Defense attorney Charles Portz of Houston argued to the jury that the prosecutors failed to prove intent because Preetorius never intended to defraud anyone. She ran SDA successfully for four years until she was ensnared in the real estate and banking crisis that overtook the whole country, Portz said.
“In her mind she believed she didn’t do anything wrong,” he argued. “This is a failed business venture, nothing more.”
What she did, the prosecutors countered, was run a Ponzi scheme. The lies, tricks and deceit got her what she wanted – other people’s money, Stewart argued.
“She’ll say whatever it takes to keep the money coming in,” Stewart said to the jury. “The truth has to come out ... Don’t let her hold you off any longer.”