May 20, 2014
David Prenatt of Montecito, California charmed a number of area residents into investing in home or hotel deals between 2007 and 2009. Instead of investing the funds as promised, he used much of the funds to support an extravagant lifestyle. Prenatt allegedly spent $500,000 on rehab for his daughter, $350,000 on cars, $350,000 on mortgage payments, $250,000 on travel expenses, and additional money on other personal expenses.
Prenatt repeatedly misstated his net worth to secure loans from individuals and financial institutions. In May 2008, Prenatt told CoastHills Federal Credit Union he had a net worth of $17.9 million. In February 2009 — eight months prior to being forced into bankruptcy — he said he had a net worth of $21.7 million. He did not disclose the $11.5 million he allegedly owed to creditors on his financial statements. The bank reported that had it received accurate financial statements, it would not have made the loans.