Wednesday, April 3, 2013

Guilty Verdict For Final Two Defendants In Ponzi Scheme That Duped Victims Into Refinancing Homes, Drawing Down Retirement Savings For Fraudulent Investments; Racket Pushed 201 Homes Into Foreclosure

In Riverside County, California, The Press Enterprise reports:

  • Six years ago, Anna Richter stood shoulder-to-shoulder with 40 people at a busy Temecula intersection to chide law enforcement and call attention to a Ponzi scheme that had shattered their lives.

    Homes had been lost. Savings depleted. Reputations ruined.

    A civil racketeering case was brewing against the culprits of a real estate and currency exchange scheme that was taking place in California, Arizona, Texas, Washington, Oregon, Arkansas and on federal military lands.

    The FBI, Securities and Exchange Commission, Riverside County investigators and prosecutors in several states were probing the alleged pyramid-styled investment scam. But the protesters were getting anxious. They said evidence was being destroyed.

    Standing outside The Promenade mall clad in orange T-shirts in May 2007, the families revealed the profit-making scheme and labyrinth of shell companies that James Benjamin Duncan, Hendrix Montecastro, Christopher Oetting and Maurice McLeod ran with other co-conspirators to entice hundreds of “core clients” to refinance their homes, draw down retirement and other savings and max out credit cards for fraudulent investments on houses, hospitals, diamonds and dinar, the Iraqi currency.

    By the time the dust settled on the $142 million real estate and securities fraud case, investigators said 201 homes in Riverside County were pushed into foreclosure. Duped investors across the West were sent into financial ruin.

    “It seems like an old, bad nightmare,’’ Richter said. “We came out of it beaten and bruised.”

    Montecastro and his mother, Helen Pedrino, were found guilty March 25 of hundreds of felony crimes for their role in the mortgage and securities investment scam.

    Richter said she will not feel total vindication until she sees the last two of seven convicted co-conspirators behind bars for a long, long time. Together, prison sentences for the son and his mother could exceed 130 years.


    Montecastro, 40, of Maryland, was convicted of 304 counts that included grand theft, destruction of evidence and felony fraud against 26 of 27 named victims — with asset losses totaling $3.6 million, Riverside County Chief Deputy District Attorney Vicki Hightower said.

    He faces a prison sentence of more than 100 years.

    Pedrino, 61, of Murrieta, was found guilty of 54 felonies based on her recruitment of five victim investors. She faces a sentence of more than 30 years, Hightower said. The two, who have been jailed since the verdicts were read, face a bail hearing Tuesday, April 2. Sentencing is set for April 22.

    Duncan, the mastermind who struck a plea agreement with the state and testified against Montecastro and Pedrino, is also expected to be sentenced in April, along with McLeod, another top lieutenant in the Ponzi scheme.

    Oetting, another admitted swindler, hanged himself Feb. 16, 2010, at his home on Sagewood Drive in Palm Desert. Months before, he admitted to money laundering, conspiracy and four counts of filing false tax returns and awaited sentencing while free on $225,000 bond.

    The others — Charlie Choi, Cindy Kelly and Thuan Nhan Du — are on probation after pleading guilty to selling securities without a license.

No comments: