Austin man convicted of hotel investment fraud

AUSTIN, TX – An Austin man was sentenced to 70 months in prison today and ordered to pay $5,052,366.92 in restitution for his role in a fraudulent scheme.

According to court documents, from 2012 to June 2018, Jason Michael Schubert, 47, devised a scheme to extract millions of dollars from hotel investors. Schubert identified potential investors by holding seminars on how to make money investing in hotel properties, known as “Rich in Five” seminars, charging attendees a substantial fee to attend. Schubert then solicited money from the attendees to invest in pre-existing hotel properties that he would manage and operate while claiming investors would profit with little effort on their part.

However, many hotels were older and in very poor condition. Although Schubert has no hotel management experience, he said investor funds would be used to renovate the hotels. Instead, he embezzled the money by paying himself a hefty “management fee.” Schubert’s fraudulent activities depleted investors’ funds, resulting in the seizure of hotel properties with a loss of over $5 million to investors.

On December 2, 2020, Schubert pleaded guilty to one count of wire fraud and one count of participating in a monetary transaction involving criminal property.

“This defendant engaged in a complex fraud involving commercial real estate, transferring funds between numerous bank accounts and making numerous false promises to well-meaning investors,” said U.S. Attorney Ashley C. Hoff. “Like so many other fraudulent schemes, this scheme was designed to line the defendant’s pockets with other people’s hard-earned money. Now that his scheme has been busted, we are confident that the prosecution and conviction of this accused will bring a measure of justice to his victims.

“This is a clear case of a criminal taking advantage of investors by embezzling their savings for his own financial gain,” said FBI Special Agent in Charge Oliver E. Rich. “The FBI will vigorously pursue those who commit these types of fraudulent schemes to hold them accountable for their actions.”

This matter was investigated by the FBI, with the assistance of the Internal Revenue Service – Criminal Investigations, the Texas State Securities Board and the Texas Department of Insurance.

Assistant United States Attorney Matthew Devlin prosecuted the case.

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