Mortgage Fraud question

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Hello,

I haven't posted before but read the boards a lot. I have a question that I am sure someone has the answer to.

I am new to REI and met another local investor who I am pretty sure took me for a ride. I made a stupid mistake and want to know what I should do. I ended up loaning this guy about 25k unsecured (which I know was my first mistake) expecting to make 5k when he finished his flip 60 days later. He had a loan from a hard money lender for the project but needed money to get started with.

This guy bought a property and was to spend like 200k on the rehab. He did not finish the rehab but collected most of his rehab money on the work he did do. From what I have figured out he had business accounts for materials and just didn't pay many of his labor people for their work.

The property was foreclosed on and went back to the lender. From what I was told he is in the process of filing bankruptcy so he wont be paying back his suppliers or anyone he owes. Somehow he pocketed most all of the money he got from the lender for the rehab and basically walked away leaving people holding the bag yet he made pretty big money. I could be wrong about this, but its how it looks to me. (of course I feel screwed so I reserve the right to be wrong)

I know I will never see my money back because of the bankruptcy. I also know I would never be able to prove he walked away with cash since I had nothing to do with his business and have nothing but a note as a lender.(or fool it seems)

My question is, isn't this some form of mortgage fraud? If he did take money from the lender and then didn't use that money on the property and left people hanging by not paying the bills? The lender already took back the property so there is no assets to help recover my money when he files bankruptcy. I guess I am just looking for options to not only get back my cash, but to also stop him from doing this again to other people.

Should I be raising hell with the lender or should I be contacting someone else? My attorney says to write it off but I cant help but feel this guy did something illegal. The lender didn't do anything for the people who had liens on the property since they were released when they foreclosed and took it back. Again I could be totally wrong since I was never privy to his books, but looking for opinions.

Should I just take it as a lesson learned and quit fretting about it or do I have any options? I live in Las Vegas if that makes any difference.

Thanks for any help