Massive Katrina Investment Fraud Scheme Comes to an End

In the wake of hurricane Katrina, one of the most destructive hurricanes to ever strike the Gulf Coast, the United States and the world came together in an effort to help the devastated region and the city of New Orleans recover.

While many came with the intent to help, not everyone had the disaster victims’ best interests at heart. William C. Lange, a 67-year-old Washington state businessman, was one of the latter.

Lange headed a conspiracy involving two separate companies that promised funds for real estate projects and claimed to have access to millions of dollars from lenders. However, to receive funds from Lange’s Harbor Funding Group Inc, participants would have to pony up 10 percent of their potential loan ahead of time as a means of expediting the funding process.

As it turns out, Lange and his group never had any lenders at all. Lange and his conspirators, his own son among them, took the money and used it for personal expenses. They took in over $9 million, which was spent on salaries for his cronies, a new house, and a variety of alternate business ventures.

After the Katrina money dried up, Lange also established a second company, Black Sand Mine, Inc. It supposedly intended to establish mining ventures in Alaska but was also a fraud.

The FBI, after receiving complaints about Lange’s businesses, began investigating financial documents and interviewing witnesses in the hopes of unraveling the web of lies that Lange had woven. With help from the Postal Inspection Service, the FBI was able to gather enough information to arrest Lange for conspiracy to commit wire and securities fraud.

After the conviction of several of his compatriots, Lange pled guilty and admitted to taking a leadership role in both the mining and Katrina schemes.

Lange was sentenced in March to 22 years in federal prison for his crime, and while investigators are pleased to hear that Lange received a lengthy jail term, it will be some time before the hundreds of victims who Lange devastated financially will be able to recover.