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Lynchburg-area real estate manager sentenced for fraud

A Forest man who owned a Campbell County-based real estate management company was sentenced Wednesday to three and a half years in prison for an embezzlement scheme involving hundreds of thousands of dollars.

Timothy Darrell Penick

Penick

Timothy Darrell Penick, 39, of Forest, pleaded guilty to one count of wire fraud in U.S. District Court in Lynchburg in May 2021.

“This defendant violated the trust of his clients through his fraudulent behavior,” United States Attorney Christopher R. Kavanaugh said in a news release. “I am grateful for the work of the local, state, and federal law enforcement agencies that brought him to justice and will provide the victims in this case with restitution for the crimes committed against them.”

According to Assistant U.S. Attorney Michael Baudinet, Penick founded Lighthouse Properties of Virginia in 2011 and started a scheme to defraud several homeowners associations and property owners around the middle of 2018.

According to a news release from the trial, Penick directly accessed bank accounts of the company’s clients and transferred money to other accounts he controlled. He concealed the transfers by creating fraudulent bank statements for those clients, which were not authorized by the individuals.

Penick was the only authorized owner and handler on the Lighthouse Properties accounts, according to the news release.

Penick, who took the stand during Wednesday’s sentencing hearing, said the money was taken to pay for several things at Lighthouse Properties, namely payroll.

Penick said the company was “undercapitalized” from the start.

Judge Norman K. Moon said Penick was “robbing from Peter to pay Paul.”

Baudinet said when the company became strapped, Penick decided to “turn to fraud” and created what the Baudinet called a “sophisticated scheme” similar to a Ponzi scheme.

The U.S. Attorney’s Office sought a maximum 51-month sentence for Penick in addition to the large amount of restitution to be paid back.

Penick, who apologized in court Wednesday to several of the people he defrauded, said he “understands the egregious nature of the offenses” and while he will have to pay restitution, which according to a tally that Moon read in court Wednesday totaled more than $950,000, he knows he can never “make it whole.”

Moon ordered Penick to report for his sentence no earlier than Sept. 1, as he finishes online courses for a degree program, as well as to pay restitution upon his release.

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