San Diego CPA Gets 63 Months for $8.2 Million Fake 'ADU' Real Estate Investment Scheme

Published Nov. 2, 2026. Case statuses are current as of that date.

Backyard cottages, known as accessory dwelling units or ADUs, have been a hot topic in California's housing market. According to federal prosecutors in San Diego, a certified public accountant used that interest to borrow millions of dollars from people who thought they were funding real estate projects. No ADUs were built. The money was lost on risky day trades.

Ethan Joseph Sanchez, 30, of San Diego, was sentenced in federal court to 63 months in prison, the U.S. Attorney's Office for the Southern District of California announced on Oct. 30, 2026 [1]. U.S. District Judge Robert S. Huie also ordered Sanchez to forfeit more than $8.2 million and to pay restitution to victims. Prosecutors say he stole more than $8.2 million.

How the scheme worked

Sanchez was a certified public accountant during the scheme, according to the U.S. Attorney's Office. In his plea agreement, he "admitted ... to lying to victims repeatedly to convince them to loan money to him and his business entity, BSC Equity Ventures, LLC" [1].

According to the release:

• The pitch. Sanchez told victims their money "would be used to fund real estate transactions, like building accessory dwelling units ('ADUs') on specified properties."
• The promise. He said "he would promptly return both principal and interest to victims."
• The reality. "Unbeknownst to the victims, Sanchez did not fund any real estate transactions or build any ADUs, rarely returned any money, and instead lost the money via risky day trades."
• The spread. At sentencing, Judge Huie noted that Sanchez used victims to recruit other victims, sometimes their own family members.

The release's summary of charges lists federal wire fraud (18 U.S.C. § 1343) and money laundering (18 U.S.C. § 1957), each of which carries up to 20 years in prison. It does not say which counts Sanchez's plea covered. The case number is 25-cr-04062.

The sentencing

Several victims spoke at the sentencing hearing. One described the pain Sanchez had caused him and praised law enforcement: "He was caught by the FBI, thank God" [1].

Judge Huie called the scheme "aggravated and reprehensible," according to prosecutors. The judge described the "almost unimaginable" harm Sanchez caused by stealing money his victims had earned, and said the harm was much greater than the financial loss alone.

"Ethan Sanchez exploited the trust of hardworking people and stole their savings through lies and fabricated investments," U.S. Attorney Adam Gordon said. "This sentence reflects the profound harm he caused."

The FBI investigated. Assistant U.S. Attorney Eric R. Olah prosecuted, with earlier help from Assistant U.S. Attorney Sarah Akhtar.

Why professional credentials can lower people's guard

A professional license is a real credential, and it can make an investment pitch sound safer. But a license in one field does not make someone's private deal legitimate. In this case, prosecutors say, the money went to day trading rather than the construction projects investors were told about.

The scheme also spread person to person. When early investors bring in friends and relatives, often in good faith, a fraud can grow fast, and the people who recruited others can lose both money and relationships.

Private loans to a person or small company for a specific project are generally riskier and less transparent than many other investments, because there may be no independent party checking where the money goes.

Red flags

These are general warning signs of private real estate investment fraud, not findings about any defendant:

• Vague project details. Ask for addresses, permits, contractor contracts and title records, and verify them yourself with the city or county.
• Promised fixed interest and a "prompt" return of principal on a construction project, which in reality can face delays and cost overruns.
• Money paid to the promoter's company instead of an escrow or title company, or a lender secured by a recorded lien.
• A friend or relative recruiting you after investing themselves. They may sincerely believe in it. Check the deal independently anyway.
• Credentials used as reassurance. A license doesn't replace due diligence. Check state licensing boards and the SEC and FINRA databases (adviserinfo.sec.gov, BrokerCheck).

What to do if you're targeted

1. Ask for documents and check them against public property and permit records.
2. Get independent advice from an attorney or a licensed adviser who has no stake in the deal.
3. If you've already invested, keep all records, including promissory notes, wire confirmations and texts.
4. Report it to the FBI at ic3.gov, the SEC at sec.gov/tcr, and your state securities regulator.
5. Age 60 or older? The DOJ Elder Justice Hotline is 1-833-372-8311 (1-833-FRAUD-11).

Case status (as of Nov. 2, 2026)

Defendant	Court	Status as of Nov. 2, 2026	Source
Ethan Joseph Sanchez, 30, San Diego (BSC Equity Ventures, LLC)	Federal, S.D. Cal., No. 25-cr-04062	Admitted the scheme in a plea agreement (the release's charge summary lists wire fraud, 18 U.S.C. § 1343, and money laundering, 18 U.S.C. § 1957, and does not say which counts the plea covered); sentenced to 63 months; ordered to forfeit more than $8.2 million and pay restitution	[1]

Statuses can change, for example on appeal.

Sources

1. U.S. Attorney's Office, Southern District of California, "Man Sentenced for Defrauding Victims in 'ADU' Investment Scheme," Oct. 30, 2026. https://www.justice.gov/usao-sdca/pr/man-sentenced-defrauding-victims-adu-investment-scheme

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