Steven D. Blumhagen's second brush with the law is going to cost him $1.275 million.
A federal judge ordered the Amherst businessman to repay that amount to the 18 victims he stole from as part of a bond offering scheme 15 years ago.
Blumhagen, who pleaded guilty to misdemeanor bank theft, was sentenced Wednesday by U.S. District Judge William M. Skretny to time served – he already spent about two years in custody – and ordered to pay restitution.
Now 67, he admitted soliciting money from victims with promises that it was for "advance fees" tied to a bond offering that would generate large sums of money.
He was, in reality, using the money for personal expenses.
"It's certainly taken its toll," the businessman said of the decade-long prosecution against him, which began in 2008. "It seems like it's gone on forever."
Assistant U.S. Attorney Elizabeth Moellering reminded the court that this is Blumhagen's second fraud-related conviction and that some of his victims think he'll commit another crime.
During his sentencing, she read from letters submitted by five of the 18 victims, including one that called Blumhagen a "scam artist."
Blumhagen's guilty plea in the bank offering case followed a 2006 conviction for mail fraud in connection with the Tee-to-Green Golf project in Buffalo. Blumhagen was company president at the time and was accused of cheating more than 180 investors out of $11.5 million in a plan to build upscale golf parks in Buffalo and other cities. In that case, he admitted falsely telling investors their money would be protected by bonding and insurance.
Defense lawyer Mark J. Mahoney said his client has been out of trouble for more than a decade and is now faced with the prospect of paying back $1.275 million.
"We're many years down the road from the original conduct," Mahoney told Skretny at one point. "He's paid his price in many ways."
Mahoney said his client is involved in a number of large, local developments and plans to put his financial talents to better use in the future.