A Sacramento-area man is serving 12 years in federal prison on securities fraud charges. The man, who recruited a half-dozen accomplices, initially pleaded guilty to operating a Ponzi scheme. He defrauded nearly 200 investors over a 2-year period.
The man initially caught the attention of federal investigators who were reviewing a mortgage fraud operation. As the investigation progressed, FBI and IRS agents realized that mortgage fraud was only one facet of the scheme.
Investigators say the man offered prospective investors a “wealth-building” program. He held seminars at hotels and casinos to attract potential investors. In addition, he offered financial planning services including college tuition and retirement investing. During the seminars, he asked prospective investors to submit their tax returns and pay stubs. He also asked them to supply information about the value of their homes and other assets.
Armed with the investors’ financial information, he divided them into tiers. He directed some investors to purchase whole-life insurance policies on which he secretly received a commission. The man directed other investors to take home equity loans and investing the proceeds into his funds. He also directed them to move their retirement savings to his funds. The man directed still other investors to purchase homes in California, Florida and Arizona, which he selected. He used phony appraisals on the properties to make investors think they had purchased property below market value.
He used some funds to pay initial investors, his co-conspirators and himself. In 2008, the real estate market collapsed and he could no longer operate the scheme. Some investors lost all of their savings, while others actually lost their homes.
California securities fraud attorney
Initially, federal authorities charged the man in 2012. He pleaded guilty to the charges in 2016, but when he returned for sentencing, he fired his attorney. He also claimed that he had been pressured to plead guilty, and asked to represent himself. The judge ultimately rejected his arguments, and refused to set aside his guilty plea. The judge sentenced the man in February 2018 to 12 years in prison. Five other co-conspirators are already serving prison sentences. A sixth co-conspirator died prior to sentencing. A restitution hearing for one of the defendants will be held next week.
This case demonstrates how complex securities fraud cases can be. When you face investment fraud charges, hire an experienced securities fraud attorney like Robert Helfend. Mr. Helfend has more than 30 years of experience in courtroom defense. He has represented thousands of Californians in both federal and state courtrooms.
Contact Robert Helfend or call toll-free at (800) 834-6434, (805) 273-5611, (310) 456-3317 or (818) 591-2809 for an immediate consultation on your Ventura County securities fraud case.
Photo Credit: yepyep, via Flickr.com