The majority of elderly victims targeted in this international scheme resided in Sacramento and Stockton, California
OAKLAND – California Attorney General Rob Bonta today announced charges against 15 individuals for allegedly conspiring to defraud at least 30 known victims out of their retirement savings through an international Ponzi scheme. Targeting elderly Filipino victims, the fraudulent scheme aimed to solicit millions in investments for the construction of a resort in the Philippines called the Pagudpud Sands Resort (PSR), a resort which has yet to open or generate income. The defendants are being charged today on an array of felony counts including grand theft, financial elder abuse, sale of unqualified security, communications containing untrue statements and omissions of material facts, and use of a device, scheme, or artifice to defraud in the offer, purchase, or sale of a security.
“Senior citizens were the direct targets of this fraudulent, international investment scheme. Our most vulnerable loved ones should never be deceived and defrauded of their hard-earned retirement money,” said Attorney General Bonta. “Those who take part in the financial abuse of elders must be held accountable for their actions.”
Since around December 2015, the defendants used their positions as financial advisors to convince elderly victims into investing in the development of PSR. Through group sales presentations, the defendants made gross misrepresentations to entice investments. For instance, the defendants made false claims that Wyndham Resorts, a well-known hotel company, had committed to managing the resort. Victims were also told that their investments would go toward the construction of PSR, when instead, the money was primarily used toward paying two of the defendants a minimum of $10,000 a month, commissions for those who brought investors to PSR, and other multi-level marketing schemes unrelated to PSR. The suspects also failed to follow through on promises made to their investors. Investors were promised “interest payments” on their investment, but did not know the promised interest payments were actually derived from other victims' investments and not the resort itself. In most cases, the suspects failed to deliver the interest payments completely.
The California Department of Justice is seeking out additional victims who have been defrauded by this scheme. If you believe you are a victim, please contact our office at (800) 722-0432.
This case stems from a joint investigation conducted by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), the U.S. Department of Health and Human Services - Office of the Inspector General, the California Department of Financial Protection and Innovation, and the Federal Bureau of Investigation (FBI). Through the DMFEA, the California Department of Justice works to protect Californians by investigating and prosecuting those who perpetrate fraud on the Medi-Cal program. DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. The Division regularly works with whistleblowers and law enforcement agencies to investigate and prosecute crimes.
It is important to note that a criminal complaint contains charges that are only allegations against a person. Every defendant is presumed innocent unless or until proven guilty.
Copies of the complaints are available here and here.
The DMFEA receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $41,264,032 for federal fiscal year 2020-2021. The remaining 25 percent, totaling $13,754,675 for fiscal year 2020-2021, is funded by the State of California. The federal fiscal year is defined as October 1, 2020, through September 30, 2021.
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May 22, 2021 at 03:13AM
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Attorney General Bonta Announces Charges Against Several Individuals on Allegations of Defrauding Elders of $5 Million Through International Ponzi Scheme - California Department of Justice
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