Three California men accused of running a $200 million Ponzi scheme, were arrested Thursday night after swindling more than 2,000 thousands investors, including many retirees who lost their life savings. State prosecutors say the case has echoes of the Bernie Madoff case, because investors were led to believe that their money was being invested in a safe, low-risk portfolio.
From CVBT: James Stanley Koenig, 57, of Redding; Gary T. Armitage, 59, of Healdsburg; and Jeffery A. Guidi, 54, of Santa Rosa, [California] have been arrested on a total of 228 criminal charges.
“These three men callously swindled thousands of individuals out of $200 million to bankroll their extravagant lifestyles,” says [California’s] Attorney General Edmund Brown Jr. “They took investors money and used it to pay for an 80-acre castle estate, a Lear jet, luxury homes and fancy cars…
Mr. Brown [said] that in 1997 the three men began peddling construction and real estate projects across California..
Victims were promised that these were safe, secure, low risk investments with double-digit returns, averaging 12 percent. In recruiting their victims, Mr. Armitage organized “investment planning seminars,” many of which targeted retirees, in the Bay Area and throughout California..
Based on advice from these seminars, Californians invested sums ranging from $50,000 to more than $1 million. Some turned over their entire retirement portfolios and savings accounts… Many of the construction and real estate projects, however, were poorly managed and were not financially viable, resulting in huge losses, Brown said. Some projects were left unfinished or ended up in foreclosure.