From a penthouse suite in Beverly Hills, Mark Roy Anderson reigned over an empire of historic landmarks across the nation.
Young, confident and charming, the Encino resident controlled 20 limited partnerships that promised federal tax benefits to investors who funded the rehabilitation of historic buildings.
In three years, 1,500 investors helped him raise nearly $50 million.
But in the end, Anderson's kingdom came tumbling down with a thud heard from Santa Monica to Millbrook, N.Y.
Buildings supposedly under rehabilitation, such as Millbrook's Carnegie Mansion, had barely been touched by remodeling crews--or had not been touched at all. And the millions raised to restore the properties disappeared into what federal authorities have called a "black hole."
"The money was basically squandered," said U.S. Dist. Atty. Jean Kawahara.
Anderson, 37, pleaded no contest in July to two counts of fraud. He was given a seven-year sentence and ordered to pay $6.7 million in restitution to his victims.
As Anderson sits in a federal prison, authorities are still struggling to chart the complex financial machinations that allowed him to carry out what they believe is the first case of fraud involving a federal tax program aimed at protecting historic buildings.
Reverberations of the Ponzi-like scam linger--and promise to do so for years.
Not only did investors lose their money, some are still in trouble with the Internal Revenue Service, which says their investments no longer qualify as tax deductions.
Anderson's accounting firm and attorneys are facing a class-action lawsuit by angry investors.
And some of the buildings that were supposed to be restored were instead stripped of ornate hardware and fixtures, leaving them in worse condition than before Anderson entered the scene, said Tom Coleman, the court-appointed receiver charged with untangling the mess.
With the benefit of hindsight, fraud victims often see early warning signs that should have alerted them to the deception, authorities said.
But in the case of Anderson's Marlin Properties, the moral of the story seems to be that there are times when investors simply cannot know.
The fact that the scam was based on a new and little-known federal tax credit, combined with Anderson's professionalism, created a unique set of factors that made discovery of the fraud difficult, authorities said.
Anderson declined to be interviewed, but in court records his attorney, Victor B. Kenton, argued that the enterprise was not a scam:
"The Marlin syndications were not designed as a 'Ponzi scheme' or to otherwise defraud investors. At the time the project began . . . Mr. Anderson was a quite young, inexperienced individual in the area of real estate."
Anderson forged a far different professional image for himself, say Coleman, prosecutors and his former associates.
According to court documents, "Anderson developed for himself a fictitious track record, claiming to have created over 150 highly successful historic rehabilitation projects involving hundreds of millions of dollars with highly favorable results."
He also claimed to be an attorney and to have testified before Congress as an expert on historic buildings, "which was completely false," Coleman said. He was never licensed to practice law in California.
Anderson did, however, graduate from McGeorge Law School in Sacramento in the late 1970s and was admitted to the Nevada State Bar in 1981.
Anderson worked for at least one investment firm before he launched Marlin Properties in 1984, laying out a simple proposition for investors:
Anderson was to purchase dilapidated historic sites, from office towers to theaters, and then return them to their former glory.
According to court documents, Anderson not only promised investors substantial tax benefits, he also offered them partial ownership of the remodeled buildings, which he said were listed in the National Registry of Historic Places.
In some cases, such as remodeled office buildings, the investors were to receive a share of the rental payments. Investors also were promised a 100% return on their investments in 10 years.
"They really painted a pretty picture," said an elderly San Fernando woman who lost $15,000. "They indicated that we couldn't possibly lose anything and that we'd be able to gain a substantial amount of money."
In business meetings and social gatherings, former business associates and friends said, Anderson was personable and articulate, exuding infectious confidence.
"Mark is brilliant," a former business associate said. "I liked the guy. I hate what he did, but he was a very likable guy. . . . If you met him you'd like him."
"He has such a warm personality," said Raoul Fima of Agoura Hills, who invested in another troubled Anderson enterprise. "He wined and dined me. . . . He was molding me, convincing me."
