$7 million fraud brings Encinitas man 5-year prison term - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

$7 million fraud brings Encinitas man 5-year prison term

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SAN DIEGO (CNS) - An Encinitas man who defrauded 30 people - mostly friends and family members - out of nearly $7 million through a 10-year investment scam was sentenced Friday to five years in federal prison.

Scott Bottolfson, 56, pleaded guilty last Nov. 30 to a single count of wire fraud. He apologized to his victims in a hearing today before U.S. District Judge Jeffrey Miller.

"I take full responsibility," the defendant said. "I have a deep sorrow for the hurt and pain that I have caused."

Bottolfson's attorney, Michael Lipman, said his client stole from two elderly sisters, his brother-in-law and mother-in-law, among others.

"It's almost incomprehensible to me," the defense attorney said. "What he did was despicable. He took their money and lived a nice lifestyle."

Miller said the fraud caused guilt and shame to many of the victims.

"The fraud has crushed dreams...depleted the retirement funds of several," the judge said.

Miller said the psychological damage done to some victims was "haunting."

"These are the type of harms that don't go away," Miller said.

The judge called the circumstances of the crime "aggravated, damaging, and fairly heinous."

He ordered Bottolfson to pay $6.8 million in restitution, but victims can expect to get back maybe 10 percent of what they lost, said Assistant U.S. Attorney Christopher Tenorio.

Ray Watson, who lost the most to Bottolfson - more than $3.4 million over 18 months - said the defendant offered to help him invest money that he got from the sale of a business and assured him there was no risk.

Watson, a 45-year-old cancer survivor, said he had a stress-induced heart attack as a result of losing millions of dollars to Bottolfson.

"I don't think anybody's rich after dealing with Scott," Watson said. "If he is sentenced to a long term in prison, that would be the beginning of my healing."

After pronouncing sentence, Miller read a list of all Bottolfson's victims and how much money they lost. The judge ordered Bottolfson to surrender on or before March 25.

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