Eastern District of California Blog

Guilty Plea In Loomis Wealth Solutions Case

Christopher J. Warren, who fled the country with a fortune in gold and returned with a paltry $70,000 in cash stuffed into the cowboy boots he was wearing, pleaded guilty Tuesday in Sacramento federal court to identity theft and wire fraud related to cheating lenders out of $19 million.

Warren, 29, was one of three men and a woman who skipped the country while under investigation as part of a still-ongoing federal probe of Roseville-based Loomis Wealth Solutions, which authorities say was a front for a Ponzi scheme that spread over five states and clipped investors for at least $100 million.

Sacramento Bee, 1/11/12

Chico Builder Pleads Guilty In Mortgage Fraud Scheme

A Chico homebuilder pleaded guilty to one count of mail fraud in federal court today, admitting to bilking lenders who financed the sale of his properties between 2006 and 2008.

William E. Baker, 65, testified he and others conspired with Garret Griffith Gililland III, 30, formerly of Chico, to artificially inflate the sales price of new homes sold to "straw" buyers Gililland had arranged as part of the fraud.

 Enterprise Record, 7/29/11

Guilty Pleas In Gililland Fraud Case

Two of the principal players in a multimillion dollar "builder bailout" mortgage fraud scheme in Chico pleaded guilty Thursday afternoon in federal district court in Sacramento.

Garret Griffith Gililland III, 29, and Nicole Magpusao, 31, both formerly of Chico and now in federal custody, entered the pleas before Judge Edward J. Garcia.

Gililland pleaded guilty to one count of mail fraud and one count of money laundering. Magpusao pleaded guilty to one count of mail fraud.

ChicoER, 5/6/11; see also Sacramento Bee, 5/6/11.

"Ground Zero" For Real Estate Fraud

This month's California Lawyer Magazine, 12/2010 has a lengthy piece entitled "Making a Federal Case Of It:  U.S. Attorney Ben Wagner Prosecutes A Limitless Variety of Real Estate Scams In the Central Valley."  The story quotes Wagner as referring to the Central Valley as "ground zero" for real estate fraud.  It also includes a little discussion of the Gililland fraud case in Sacramento and the Crisp & Cole fraud case out of Bakersfield.  

Mixed Martial Arts Fighter Sentenced to Prison For Assault And Fraud Convictions

A 28-year-old San Francisco man was sentenced Thursday in Sacramento federal court to three years and one month in prison for depriving an African American man of his civil rights by assaulting the man in a Chico bar, and for an unrelated mail fraud conviction.

On March 24, at the close of a three-day trial, a jury of six women and six men deliberated 2 1/2 hours and found Eric Loren Clawson, a former mixed martial arts fighter, guilty of the 2008 hate crime.

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Clawson's involvement in the fraud grew out of his association with Garret Griffith Gililland III, who is under indictment in Sacramento federal court on multiple counts of mortgage fraud and marijuana manufacturing.

Gililland has been linked in court papers to Lawrence Leland "Lee" Loomis, who federal authorities say is the mastermind of one of the most massive mortgage and investment frauds in the nation. No criminal charges have yet been lodged against Loomis, a Roseville resident, although he is a defendant in a Securities and Exchange Commission civil fraud lawsuit.

Sacramento Bee, 9/10/10

Families Sue To Recover Losses In Alleged Loomis Ponzi Scheme

And so the Tejas, well educated with perfect credit scores and a successful business in Chico, took the bait, siphoning $150,000 in equity out of their home in 2006 and turning it over to Loomis Wealth Solutions, a firm Loomis started in Chico and later moved to Roseville.

Today, the money is gone, part of what federal authorities say was a $100 million Ponzi scheme that has spawned a years-long investigation, a maze of mortgage fraud, drug and hate crime charges, and financial woes for investors nationwide.

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Loomis has denied wrongdoing to federal agents and through his attorney. According to Assistant U.S. Attorney Russell Carlberg, Loomis remains under investigation in an ongoing probe that has generated criminal charges against four of his lieutenants.

His financial empire is in ruins, and he and his father-in-law, John Hagener, are facing a civil complaint by the U.S. Securities and Exchange Commission, along with civil suits by investors who say they were duped out of money. Hagener answered the SEC complaint with a denial of wrongdoing; Loomis never responded and was found to be in default June 10.

The Tejas are among those suing Loomis. A group called Attorneys Against Abuse of Elders filed a proposed class-action suit in Sacramento Superior Court, calling the investment plan "an elegantly sophisticated scheme." That suit has since been moved to federal court.

Sacramento Bee, 6/28/10

Eight More Indicted In Gililland Fraud Case

Yesterday, the government indicted eight more, including a second Chico home builder, in a fraud scheme with Garret Gililland.  06-17-102ndSSIndictmentGililland:

Weeks after indicting a Chico home builder for fraudulently unloading 62 houses he couldn't sell in 2006, the U.S. attorney's office has expanded the case to a second Chico builder, William E. Baker, for allegedly doing the same with six houses.

Baker and several alleged accomplices, including a Sacramento real estate professional and an Elk Grove woman, were indicted after an expanded investigation into the two home builders' sales operations as the housing boom soured, U.S. Attorney Benjamin Wagner announced Thursday.

Federal authorities have issued arrest warrants. But they said Thursday they are offering the defendants the chance to surrender to the U.S. Marshals Service on Monday.

Sacramento Bee, 6/18/10

Chico Home Builder Agrees To Plead Guilty in Gililland Mortgage Fraud Scheme

According to today's Sacramento Bee, a large Chico home builder, Anthony G. Symmes, has agreed to cooperate and plead guilty in a mortgage fraud scheme with Garret Griffith Gililland III:

As investigators moved in, Symmes and Gililland took two different paths.

Symmes, a certified public accountant and graduate of the McGeorge School of Law, agreed to cooperate with federal prosecutors, and he has been telling them everything he knows.

Gililland decided to run, leaving his Chico mansion with $250,000 in cash. He opened a nightclub in Colombia with Magpusao, but the venture failed and they moved on to Spain.

They were arrested there and returned to Sacramentoin 2009. He and Magpusao are both being held as flight risks.  

See also KHSTV.com

Lawrence "Lee" Loomis Responds Pro Se To SEC Complaint

The man behind an investment scheme that federal regulators say cheated at least 100 investors out of $10 million has offered a point-by-point rebuttal to the allegations.

Lawrence "Lee" Loomis, 53, offered his version of events in a formal response to a civil lawsuit by the Securities and Exchange Commission (SEC).  Loomis filed the response "pro se," meaning he is representing himself in the civil case without an attorney.

The SEC lawsuit, filed in Sacramento federal court Feb. 23, claims Loomis told participants at various Loomis Wealth Solutions seminars in 2007 and 2008 that their investments in his Naras Secured Funds were safe, liquid, and guaranteed to return 12 percent per year.

The SEC alleges Loomis actually used investors' money to pay himself, his operating expenses, and to prop up what investigators have called a multi-state real estate Ponzi scheme involving 500 properties and $100 million in losses.

In his response filed March 29, Loomis claimed he never guaranteed investors a 12 percent return on their money.  "(We) were very clear that interest rates were subject to change if business conditions made it necessary to adjust the interest paid to investors," Loomis wrote.  Loomis said his sales literature advised investors their money "could be used for many purposes, including operating expenses."

4/7/10, News10.net story

Loomis Wealth Solutions: The EDCA $100 Million Ponzi Scheme?

Although Lawrence Leland "Lee" Loomis, 53, founder and president of the now-defunct LoomisWealth Solutions, has not been charged with a crime, the Roseville-based enterprise and affiliated entities have been characterized by IRS special agents as a giant, coast-to-coast Ponzi scheme.

The agents say losses are upward of $100 million, the largest fraud ever investigated in the federal Eastern District of California. They have put the company out of business by seizing its records and what was left of its cash.

Among those accused in court papers of facilitating the Wealth Solutions fraud are Christopher Jared Warren,Garret Griffith Gililland III,Scott Edward Cavell and Johnny E. Grivette Jr., all of whom worked for or with Lee Loomis at one time or another. They also worked alone and with one another independently perpetrating frauds, according to the court papers.

Sacramento Bee, 4/4/10 and "Loomis Wealth Solutions: Cast of Characters, 4/4/10