A San Diego accountant who raised millions of dollars for backyard homes that were never built has been sentenced to 63 months in federal prison. Ethan Joseph Sanchez, 30, of San Diego, was sentenced in federal court on Saturday, October 31, 2026, for orchestrating a fraud scheme in which, the Justice Department said, he stole over $8.2 million from victims by tricking them into investing in bogus plans to build accessory dwelling units — the small backyard cottages known as ADUs or 'granny flats.' U.S. District Judge Robert S. Huie also ordered Sanchez to forfeit over $8.2 million and to pay restitution to his victims.

Source: U.S. Department of Justice, U.S. Attorney's Office for the Southern District of California

Sanchez was a Certified Public Accountant during the scheme, and he admitted in his plea agreement to lying to victims repeatedly to convince them to loan money to him and his business entity, BSC Equity Ventures, LLC. The lies, prosecutors said, were specific and reassuring: victims were told their money would fund real estate transactions, like building ADUs on specified properties, and that he would promptly return both principal and interest. In reality, Sanchez did not fund any real estate transactions or build any ADUs, rarely returned any money, and instead lost the money via risky day trades.

Source: U.S. Department of Justice, U.S. Attorney's Office for the Southern District of California

'Aggravated and reprehensible': victims speak, judge responds

Several victims spoke at the sentencing hearing. One described the pain Sanchez had caused him and praised law enforcement: 'He was caught by the FBI, thank God.' In imposing sentence, Judge Huie noted that Sanchez's scheme was 'aggravated and reprehensible,' and that Sanchez used victims to recruit other victims — sometimes their own family members. The judge described the 'almost unimaginable' harm Sanchez had caused by stealing money victims had earned, and said the harm was moving, heartbreaking, and much greater than just financial loss.

Source: U.S. Department of Justice, U.S. Attorney's Office for the Southern District of California

'Ethan Sanchez exploited the trust of hardworking people and stole their savings through lies and fabricated investments,' said U.S. Attorney Adam Gordon. 'This sentence reflects the profound harm he caused.' The case, docketed as No. 25-cr-04062, was prosecuted by Assistant U.S. Attorney Eric R. Olah, with prior assistance from Assistant U.S. Attorney Sarah Akhtar, and was investigated by the Federal Bureau of Investigation. The Justice Department's summary lists wire fraud and money laundering charges, each carrying a statutory maximum of 20 years in prison and a $250,000 fine or twice the gross gain or loss.

Source: U.S. Department of Justice, U.S. Attorney's Office for the Southern District of California

How the case began: a fake identity, collateral that wasn't there

The sentencing closes a case that became public a year earlier. The FBI's San Diego office said an indictment unsealed on October 29, 2025 charged Sanchez with wire fraud and money laundering for allegedly running an investment scheme that had taken in at least $6 million from investors since 2022; he was arrested on October 28, 2025. According to the FBI, Sanchez solicited loans to BSC Equity Ventures by falsely representing that the money would fund real estate transactions, including purchasing and renovating property and building ADUs. He promised high rates of return — interest of up to 25 per cent — and represented that the loans were backed by specified collateral property and signed personal guarantees.

Source: FBI San Diego Field Office (indictment announcement)

Investigators said Sanchez went further to manufacture credibility: he created and used a fictitious identity under the name 'Richard “Rick” Aguilar.' The FBI's victim-information page for the case says that as of February 2025, BSC's financial accounts had received over $6 million from investors and Sanchez had returned less than $1.8 million to earlier investors — a pattern the FBI noted is characteristic of Ponzi fraud schemes, in which new investors' money pays earlier investors. By sentencing, the proven figure had grown: the Justice Department puts the amount stolen at over $8.2 million, reflecting victims identified as the case developed.

Source: FBI victim-information page, BSC Equity Ventures investigation

Why it matters beyond San Diego

The Sanchez case sits at the intersection of two pressures California families know well: a housing shortage severe enough to make a backyard cottage a serious investment, and interest rates high enough to make a promised 25 per cent return sound worth chasing. For Punjabi and South Asian diaspora families in California — including trucking families in the Central Valley and Southern California who routinely pool savings for property investments — the mechanics here are the warning: the borrower was a credentialed CPA, the paperwork named specific properties and collateral, and there was even a second, invented 'person' vouching for the business. Prosecutors say none of it funded a single real transaction.

What happens next

Sanchez, 30, now faces 63 months in federal prison, forfeiture of over $8.2 million and restitution to victims — the process by which the court will tally what can be recovered and distributed. The Justice Department release did not state a supervised-release term, and the FBI's victim-information page for the BSC Equity Ventures investigation remains the channel through which people who loaned money to Sanchez can identify themselves to investigators. The arc of the case — indictment in October 2025 at a $6 million figure, sentencing a year later at over $8.2 million — underlines why agents keep victim intake open: in schemes run through personal trust networks, the full list of victims rarely surfaces at the first arrest.

Source: U.S. Department of Justice, U.S. Attorney's Office for the Southern District of California