William Warren Baker, 59, Laguna Nigel, California, was convicted of stealing over $900,000 from investors in a Ponzi scheme by fraudulently promising to buy, refurbish, and re-sell distressed homes for a profit.
As previously reported by Mortgage Fraud Blog, Baker pleaded guilty to 13 felony counts of using untrue statements in the purchase or sale of securities and one felony count of grand theft from the United States Social Security Administration (SSA) with sentencing enhancements and allegations for loss over $100,000, aggravated white collar crime over $500,000, and property damage over $150,000. He faces a sentence of up to 10 years in state prison at his sentencing July 15, 2011, at 9:00 a.m. in Department C-40, Central Justice Center, Santa Ana, California.
A Ponzi scheme is when investors are offered high, short-term returns on investments, but instead of the investments generating actual income and legitimate profits, the money from the investors is kept for the benefit of the defendant or used to repay earlier investors.
Between Jan. 20, 2006, and May 7, 2008, Baker took over $900,000 from at least 10 investors that he met through church, friends, and other personal relationships. The defendant told investors that their money would be used to buy and refurbish distressed homes, which he could then sell for a profit. Baker issued unqualified stock certificates in exchange for investor funds.
The defendant failed to purchase a property to be renovated and flipped as promised to his investors. Baker instead purchased a property for himself and transferred the property into a trust belonging to his son. He later transferred the property into a trust belonging to his wife. Baker used investor money for personal expenses or to pay back old investors from previous ventures.
In January 2009, Baker‘s 82-year-old mother Sara Jo Mowery went missing. The Orange County Sheriff’s Department (OCSD) began investigating her disappearance and uncovered the Ponzi scheme in the course of the investigation. Following a lengthy investigation into the fraud, Baker was arrested in March 2010.
While Baker was in custody for the Ponzi scheme, OCSD found that the defendant has been stealing from SSA. Baker had set up a previously undiscovered joint bank account with Mowery containing social security benefits intended for his mother. After his mother’s disappearance, Baker began illegally withdrawing the funds from that account, stealing $6,100 in all. By law, in the event that a social security recipient goes missing, the SSA funds are to cease being provided to any beneficiary until the missing person is found or pronounced deceased.
Mowery is still a missing person and the investigation into her disappearance is ongoing. Anyone with information regarding her whereabouts should contact OCSD or their local police department.
Deputy District Attorney Marc Labreche of the Major Fraud Unit is prosecuting this case.