A Woodstock man was sentenced in federal court in Rockford Monday for carrying out a $7 fraud scheme through his McHenry County business, InvestForClosures. 

Francis X. Sanchez, 52, co-owned and operated the business and was sentenced to 136 months in prison and to pay $7.8 million in restitution for his role in the scheme, according to a press release from the Federal Bureau of Investigtion. Sanchez pleaded guilty in May. 

Sanchez’s business partner, James D. Bourassa, 55, of Gilberts pleaded guilty to mail fraud and was sentenced on June 11 to 51 months in federal prison, according to the news release. 

According to his plea agreement, InvestForClosures bought distressed houses, rehabilitated the homes and then sold the houses for a profit. 

Investors in the business believed their funds were being used to purchase real estate and told investors that because of the money came from buying and selling homes, InvestForClosures always made its interest payments on time and would return investor’s principal when requested, according to the news release. 

Instead, the FBI learned the majority of investor funds was instead used to pay other expenses and the salaries for Sanchez and Bourassa and to pay for "Ponzi-type interest to prior investors," according to the news release.

The FBI also learned InvestForClosures was not making enough money from property sales to pay the interest owed to the investors. 

Sanchez told authorities in order to further conceal his scheme from investors, he told them he was developing an exclusive, luxury residential community in Mexico called Sands of Gold and solicited them to buy lots and invest in the Sands of Gold project, according to the news release. 

In total, authorities determined Sanchez recieved more than $9 million from investors and about $1.7 million was paid back to investors through Ponzi-type payments. 

The case was investigated by the Rockford Office of the Federal Bureau of Investigation, the Chicago Office of the United States Postal Inspection Service and the Illinois Secretary of State's Securities Department.