5 Charged for Real Estate Investment Scam

Allison Tussey —  September 15, 2011 — Leave a comment

Michael Bolden, 57; Christopher Jackson, 43; Victor Alvarado, 50; Nicholo Arceo, 38; and Erica Arceo, 43; all of Sacramento, California, are the subjects of a 27-count superseding indictment charged with wire fraud and mail fraud for a real estate investment fraud scheme.

According to the indictment, the defendants were affiliated with Diversified Management Consultants (DMC), an umbrella for their “investment clubs” which, together, defrauded 180 victims out of approximately $26 million.

The indictment alleges that the defendants induced people to invest their ordinary savings, tax-deferred retirement savings, and proceeds of “cash-out” residential loan refinancings. They told investors that their money would be used for purchasing property and building structures for a real estate venture. In fact, victim money went to pay other investors’ bogus “returns” on investment and to pay for the defendant’s personal expenses, including luxury lifestyle expenditures. Jackson had been charged in an earlier indictment.

According to public records, in 1994, Bolden was sentenced by U.S. District Court Judge Edward J. Garcia  to 21 months in prison for conspiracy, loan fraud, and securities fraud following an earlier federal investment fraud prosecution.

This case is the product of an extensive investigation by the FBI. Assistant United States Attorney Matthew D. Segal is prosecuting the case.

If convicted, the defendants in these two cases face a maximum statutory penalty of 20 years in prison plus a fine of the greater of $250,000 or twice the gain or loss from the scheme. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This law enforcement action is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. One component of the FFETF is the national Securities Fraud Working Group, which is tasked with combating investment fraud schemes. For more information on the task force, visit StopFraud.gov.

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Allison Tussey

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