Diehl, 30, of Coto de Caza, pleaded guilty in United States District Court to three counts of wire fraud and one count of money laundering. According to his plea agreement, Diehl falsely represented himself to potential clients as a banker who made “hard money loans” to businesses or individuals. Diehl also admitted that he fraudulently collected deposits for lines of credit for people who desired financing for construction and development projects in Mexico.
Diehl told investors that he would pool their funds and make secured loans to individuals or businesses that had shortterm cash needs. Instead of using investor funds to make loans, he used investors’ money to repay earlier investors and to fund his lifestyle. Diehl also told victims involved in construction projects in Mexico that he could secure multimillion dollar lines of credit. He told one victim that it would cost $1.175 million to secure a $24 million loan and that the deposit would be used as collateral for the line of credit. The victim eventually paid Diehl $2.5 million, money that Diehl used to pay, among others things, other people who had made investments with Diehl. None of the victims ever obtained a line of credit through Diehl.
In his plea agreement, Diehl admitted that he caused losses of just over $5 million. Diehl faces a statutory maximum sentence of 20 years in federal prison for each of the three counts of wire fraud and 10 years in prison for the money laundering count.
Diehl was initially charged and arrested in this case in March 2008. After being freed on bond, Diehl’s bond was revoked in January after he attempted to enter into a real estate transaction for a $3.5 million house using a false name and someone else’s social security number.