Monday, June 25 , 2018, 5:30 am | Overcast 63º

 
 
 
 

Former Montecito Businessman Sentenced to Prison, $13 Million in Restitution for Securities Fraud

Santa Barbara County District Attorney Joyce Dudley announced today that David Prenatt was sentenced to 10 years state prison and ordered to pay $13,200,823 in restitution to the eight victims in the case.

On Sept. 9, 2014, Prenatt pled guilty to seven felony counts of engaging in a fraudulent securities scheme, a violation of Corporation Code section 25541. Prenatt also admitted a special allegation that the crimes were related felonies, a material element of which is fraud, which involved a pattern of conduct that involved the taking of more than $500,000.

Prenatt is currently serving a 51-month federal prison sentence after pleading guilty to providing false information on a personal financial statement to a federally insured bank.

Prenatt began serving his federal sentence on Dec. 9, 2013 and will not finish serving that sentence until August of 2017.

Prenatt’s 10-year sentence in the state case will not begin until he finishes his federal sentence, at which time he will be transported from federal prison to the California state prison system.

From 2006 to 2009, Prenatt, who owned and operated David Prenatt Financial, located in Montecito, solicited friends and family to provide him large unsecured personal loans, telling them that he had a short term lending business, in which he would use their money to provide bridge loans to other individuals at a high interest rate.

Prenatt promised high rates of return and indicated to them that there was no risk in their investments because he had the personal assets to cover their investment.

In 2012 a Chapter 11 Trustee’s report concluded that Prenatt did not use the investor’s monies to provide short term loans as he had represented, but instead, used the money primarily to support an extravagant lifestyle while also paying returns to his early investors. 

 

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