When Does an Investment Loss Become a Crime?

County prosecutors have charged a Bremerton man with theft after some investors failed to see any returns from their investments with him. You might have read this story back in March. Basically, the investigators say the defendant didn’t pay back about $113,000 to four people who had bought into a plan to build ethanol plants, including one in Bremerton.

Some of the commenters on the story didn’t see that as a crime — but rather simply a lost investment.

“A buisnessman has an idea, gets investors, permits, formulates a plan and the plan fails,” commenter Mumbles wrote. “This happens all the time with no intention to defraud the investors. They hedged their bets on a plan that has failed … He had an idea, they liked it, it has not yet panned out. Move on.”

I consulted Chris Casad, chief of case management for the Kitsap County Prosecutor’s Office, in an attempt to find out how this case is any different than, say, buying a bunch of stock and then seeing the stock price drop.

“A crime is committed when the person who receives your money is only interested in receiving your money and putting it in his pocket,” Casad said. “He’s not interested in getting you a return on an investment.”

Perhaps arguments in the case, should it go to trial, will hinge on these very ideas. We’ll have to wait and see.

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