A 21-count indictment has been handed up in U.S. District Court against a Valley father and son accused of defrauding more than a quarter-million dollars from investors, many of them elderly.
The indictment alleges that beginning in October 2009, Larry Heartburg, 66, of Paradise Valley, and Rolf Heartburg, 40, of Phoenix, induced victims to invest in the Phoenix Real Estate Opportunity Fund.
Investors were told the "short-term bridge loans" would accrue interest and mature by the end of 2011, according to the indictment.
In reality, all money went toward finder's fees, legal expenses and the Heartburg's personal expenses, the grand jury said.
Larry Heartburg was the lead manager of the fund and Rolf Heartburg was a self-described financial planner and a sales rep for the fund.
Rolf Heartburg's sales presentation downplayed the risk, the indictment alleges.
From Oct. 30, 2009 through Sept. 14, 2012, the fund received $257,270 from investors.
The indictment alleges the Heartburgs enticed investors in to buying additional "units" at a discounted rate.
"Over time, (the pair) deceived victims into believing they 'units' they had purportedly purchased were valuable. In fact, the 'units' were worthless because the promised debt instruments were never purchased and the Heartburgs had de[depleted the investors' money on personal expenses," the indictment stated.
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