Paradise to Prison: Pettibone Sentenced in $1.5 Million Ponzi Scheme

FBI: Rick Pettibone spent clients’ money on two Del Ray homes, a $400,000 yacht; fled to Costa Rica. Investors in Lorton, Springfield and Sterling impacted.

Trading the D.C.-area rat race for a quiet seaside paradise sounds like the ending to a John Grisham novel.

It’s a daydream that former Alexandria resident Richard Allen Pettibone, 44, almost made a reality. But the money he used to fuel his dreams—$1.5 million—wasn't his.

Pettibone stole the money in a Ponzi scheme from his investment clients in Springfield, Lorton and Sterling, he acknowledged last week in a plea agreement with the U.S. Attorney’s office.

Pettibone was sentenced Thursday to three years in prison for mail fraud. Federal public defender Joshua McIntire Paulson represented Pettibone, Assistant U.S. Attorney Uzo Asonye prosecuted the case and U.S. District Judge James Cacheris accepted the plea agreement.

Playing Cat and Mouse with Investors

From February 2003 to February 2006, “Rick” Pettibone, a 1985 graduate of the old Thomas Jefferson High School in Fairfax County, operated Benten Investors, LLC. He operated the company from an Old Town Alexandria address on the 400 block of N. Lee Street, according to Peter Carr, public information officer for the U.S. Attorney’s Office for the Eastern District of Virginia.

For several years, Pettibone played cat and mouse with about a dozen Northern Virginia investors, including some acquaintances, mailing them phony statements that kept them from asking too many questions while using their investment money for his own personal pursuits. The losses for one investor from Springfield totaled $400,000, according to an FBI affidavit.

Pettibone and girlfriend Debbie Clark, a graduate of Reston’s South Lakes High School who attended George Mason University, used the investors’ money to purchase two homes in Alexandria’s Del Ray neighborhood on W. Wyatt Avenue. Also using investors' money, they leased a car under Pettibone’s grandmother’s name, and splurged on a nearly $400,000 yacht, according to Carr and the FBI affidavit.

After selling the Del Ray homes, one in the summer of 2005 and another later that year, Pettibone quickly bought and sold another home on O Street in Washington in 2006.

Fleeing the Country

In February 2006, the couple fled to Costa Rica, but not before wiring $500,000 of the investors’ money to a bank there. Carr said they motored the yacht from the D.C. area to Florida. It's uncertain who was at the helm or how the yacht got from Florida to Costa Rica.

After being tipped off by disgruntled investors, the FBI began to investigate the case and eventually tracked Pettibone down at a small seaside village in Puerto Jiminez in Costa Rica, where he and Clark had opened a motel called “The Palms” near the coast. The town, population 8,000, is on the Osa Peninsula near Corcovado National Park, home to crocodiles, monkeys, parrots and jaguars, according to National Geographic.

A description of the hotel on the Costa Rica tourism site offers this description:

“Each room at The Palms Hotel is beautifully decorated, air conditioned, has hot water, first class linens, spectacular views of the Golfo Dulce and free wireless internet. The Palms Restaurant offers al-fresco dining directly on the Golfo Dulce. The menu offers regional dishes along with international cuisine on par with finer restaurants anywhere in the world.”

The Spending

The FBI investigation, led by Special Agent Michael P. Kelly, a CPA and certified fraud examiner, uncovered a tangled trail of financial transactions. According to the affidavit:

  • Pettibone and Clark bought a 43.5-foot long 2002 Cruisers Model 4450 yacht with a pricetag of $398,331.43 from Warehouse Creek Yacht Sales. Dubbed “Viviendo,” they purchased the yacht using an American Express card in the name of Clark’s mother, Nena McHugh, a former State Department employee, according to the FBI affidavit. McHugh told the FBI she was not the intended owner of the yacht. $299,286.94 of investors’ funds were used to purchase, insure, dock and maintain the boat.
  • Clark and her mother purchased one home with investors' funds and Pettibone bought another, both on West Wyatt Avenue in Del Ray. After the sale of the homes in July and November 2005, Pettibone wired four transfers totaling $530,000 from Wachovia Bank to Banco Nacional de Costa Rica.
  • Deposits, payments to the title company and mortgage payments on the homes came from the Benten Investors’ account.
  • A house on O Street in Washington, D.C. was paid for with investors’ funds; Pettibone eventually pocketed nearly $75,000 while investors lost close to $150,000.
  • Payments on 33 credit cards (Pettibone funneled nearly $500,000 from the Benten Investors’ accounts into them).

Calls to Pettibone's lawyer were not returned.

According to her Facebook page, Debbie Clark is still living in Costa Rica, where Pettibone spent 11 months in jail awaiting extradition and sentencing.

Apparently Clark will not serve any time. “The plea agreement indicates that this District agrees not to prosecute girlfriend Debbie Clark for any involvement she had or may have had in this scheme,” Carr said.

Clark still owns The Palms hotel and its restaurant, according to its current manager Erickson Lezcano Matarrita, who was contacted by Patch through the tourism bureau.

Days before Pettibone's sentencing last Thursday, Clark wrote on her Facebook page: “Rick is a good man…and I love him very much….I will miss him every day [until] we are together again.”

The federal Bureau of Prisons will determine where Pettibone serves his time, Carr said.

Typically federal prisoners prosecuted by the U.S. Attorney's Office for the Eastern District of Virginia are detained at Alexandria's William G. Truesdale Adult Detention Center while they wait to be transported to prison.

Johnathan February 16, 2012 at 08:10 PM
Three years is all this theif gets! He'll be out on a year and a half...no mention of repayment. Guess he's off the hook after that and back to "Debbie's Hotel" in Costa Rica. What a travesty of Justice, the prosecutor should be ashamed.
Ritchie February 17, 2012 at 12:12 AM
Scoundrel! Deserves to be hung.
CJ May 05, 2012 at 03:52 PM
It isn't a nice hotel if anyone cares, I live 2 blocks from it! haha
Steve January 25, 2013 at 02:16 AM
While I can't speak of what might have happened beforehand, I knew both of them in Costa Rica and they were amazing people who helped me through one of the toughest times of my life. That's all.
rupert March 27, 2014 at 05:20 AM
this is really thorough coverage. solid stuff, and i truly mean that. only left out one thing: http://youtu.be/aA5K7nq4Mi0?t=16s


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »