Eastern District of California Blog

Vassallo Seeks To Withdraw Guilty Plea

Anthony Vassallo, who pleaded guilty to masterminding a $45 million Ponzi scheme out of Folsom, wants to withdraw his plea.

Vassallo was scheduled to be sentenced today in U.S. District Court in Sacramento. Instead, his lawyer Mark Reichel has asked to withdraw Vassallo's guilty plea.

Reichel said Vassallo only pleaded guilty because he believed he couldn't adequately prepare for trial while stuck in the Butte County Jail in Oroville.

 Sac Bee Blog, 5/24/13

Read more here: http://www.sacbee.com/2013/05/24/5446322/man-accused-of-running-folsom.html#storylink=cpy

80-Month Sentence In Fresno Ponzi Scheme Case

Joseph Randall Medcalf was sentenced Monday to six and a half years in federal prison for defrauding clients of more than $3.3 million. But for many of his victims, no time behind bars would have been long enough.

One by one, close to a dozen of the victims addressed U.S. District Judge Anthony W. Ishii -- many choking with emotion -- telling him how their lives have been changed for the worst since they entrusted Medcalf with their life savings.

Medcalf, 57, defrauded the clients between May 2002 and October 2007 by encouraging them to invest in bogus investment opportunities. He used money from later investors to pay earlier investors. Then, in 2008 he fled to Panama.

Fresno Bee, 5/20/13

Read more here: http://www.fresnobee.com/2013/05/20/3307014/fresno-man-sentenced-to-prison.html#storylink=cpy

Fresno Prosecutors Charge Visalia Woman In Alleged $1.5 Million Ponzi Scheme

A federal grand jury in Fresno on Thursday indicted a Visalia woman on charges that she conspired to scam more than $1.5 million in a Ponzi scheme in which victims believed they were investing in Arizona real estate.

Obdulia Julie Leon, 44, also known as Julie Ochoa, of Visalia, was named in the 18-count indictment on charges of conspiracy, mail fraud and wire fraud. Also indicted was Bonnie Lynn Recinos, 51, also known as Bonnie Farr, of Mesa, Ariz.

Federal prosecutors allege that Recinos, who managed a financial services firm, and Leon offered people investments in a real estate business project in Arizona, promising returns of 3% to 5% interest per month. But instead of investing the money, prosecutors say the women used the money for their own business and personal use.

Fresno Bee, 2/9/12

Elite Financial Alleged Ponzi Scheme Defendant Released Friday

The man the Feds accuse of stealing $2.4 million walked out of the Fresno County jail Friday night and hopped into a cab. Jimmy Singh told us he had nothing to say about the criminal charges against him.

U.S. Attorney Benjamin Wagner had Singh arrested on Thursday for investment fraud. In court documents obtained by Action News an FBI agent describes it as a "Ponzi" scheme.

Singh, who's real name is Janamjot Singh Sodhi is accused of selling phony investments out of his company called Elite Financial.

ABC30, 9/16/11

Ponzi Schemer Sentenced to 57 Months

Luis Fernandez, 37, of Folsom, was sentenced to four years and nine months in federal prison for running a Ponzi scheme that lost $2.1 million and touched 50 victims.

The sentencing was Tuesday in federal court in Sacramento before Senior U.S. District Judge Lawrence Karlton.

Between the fall of 2004 and spring of 2009, Fernandez collected $7.4 million from investors by promising them a 3 percent monthly return on their money through his Fernandez Financial Inc. in Folsom, according to court documents.

Sacramento Business Journal, 8/24/11

While FBI's HL Leasing Investigation Continues, Swindled Investors Start Class Action Jury Trial In State Court

While the FBI continues to investigate the alleged HL Leasing ponzi scheme after the suicide of former CEO John W. Otto, see my HL Leasing posts, the Fresno Bee reported yesterday that opening statements have begun in a Fresno County class action jury trial brought by swindled investors:

Two years after FBI agents raided a northwest Fresno business to investigate an alleged Ponzi scheme, the investors began their quest Thursday to get their money back -- more than $100 million.

But their task will be difficult.

John W. Otto, the alleged mastermind of the scheme, committed suicide in 2009, leaving two high-ranking employees from HL Leasing and Otto's widow to defend themselves in court.

And it's unclear how much money is left.

The class-action suit pits more than 1,000 victims from Fresno and elsewhere against Dan Ramirez, president of HL Leasing; Andy Fernandez, the company's chief financial officer; and Kathleen Otto, 69, of Palm Desert.

Sacramento Jury Convicts Two On All Charges In Money Growth Solutions Fraud Case

A Sacramento federal jury convicted both defendants of all counts in the Money Growth Solutions investment fraud ponzi scheme case.  Sac Bee Blog, 6/8/11.

Sacramento Jury Finds Chicken Farm A Nuisance

In a trial ending Tuesday, a jury found that the stench and fumes from a very large chicken egg farm near Tracy constituted a nuisance and Judge Mendez awarded $500,000 in damages.  Press Enterprise, 5/25/11.

Still ongoing is a Title IX action jury trial before Judge Damrell in Mansourian v. UC Davis, No. CV 03-2591-FCD, AAAU-CA, 5/18/11, and the long-delayed, wacky "Money Growth Solutions" alleged ponzi scheme trial before Judge Mueller in United States v. Groves & Mann, No. 07-229-KJM.  See 8/17/09 post.

 

Folsom Developer Indicted On Fraud Charges

David Romo, a Folsom developer reprising his role as a fraud suspect, has been indicted by a federal grand jury on charges of bilking an estimated $6 million out of investors he sucked into putting money in purported real estate developments.

Instead, according to the indictment, Romo pocketed some of the funds and used some to pay unrelated prior business expenses.

Sacramento Bee, 5/14/11.

Feds Still Investigating Alleged "John W. Otto" Ponzi Scheme Two Years After Suicide

It's been nearly two years since John W. Otto, the alleged mastermind of a Fresno-based scam that ensnared as many as 1,200 victims in California and other states, committed suicide just a few miles from his home in Palm Desert.

Since then, the case has generated more questions and few answers for investors about the millions of dollars they poured into what they thought were contracts for equipment leases.

Federal agents -- who began looking into the case just days before Otto, 67, shot himself on May 11, 2009 -- say Otto was the mastermind of a Ponzi scheme that bilked investors of as much as $138 million.

* * *

Court records in the Fresno County class-action suit indicate that in the weeks after Otto's suicide, FBI agents seized dozens of boxes of financial records, two computers and a 2006 Astin Martin car from Otto's home.

Under federal asset-forfeiture rules, agents also seized a 1993 Cessna airplane belonging to one of Otto's companies, as well as more than $232,000 in cash from bank accounts associated with Otto's companies.

In addition to the FBI, a federal grand jury also is examining the criminal fraud case.

In court records for the civil lawsuit, Santa Ana criminal defense attorney James Riddet -- hired by Kathleen Otto -- revealed the existence of a grand jury in the case.

Riddet said he was first told by Assistant U.S. Attorney Kirk Sherriff in June 2009 that a grand jury was convened.

Riddet said he has been repeatedly told by Sherriff, including as recently as a month ago, that Kathleen Otto "would be at the very least a subject of the investigation and one who could be indicted at some time in the future."

Fresno Bee, 4/30/11