An Orange County actual property proprietor pleaded responsible and one other was charged in reference to a Ponzi program that revolved round an actual property flipping funding plan, federal prosecutors mentioned Friday.
Brett Reed Barber, 42, of Costa Mesa, was charged after his arrest Thursday and is anticipated to be launched on Friday, mentioned Thom Mrozek, a US prosecutor’s spokesman. A trial date has been set for December twenty first.
Louis Alfonso Zimmerle, 62, from Sacramento, agreed in a plea submitted on Thursday, based on Mrozek, to confess to a criminal offense of wire fraud.
The 2 are co-owners of Newport Seaside-based BNZ Capital One LLC.
The duo additionally face a criticism with the Securities and Alternate Fee that was filed on Thursday.
The 2 have raised not less than $ 13.5 million from about 105 traders since June 2019, based on the SEC.
The 2 promised a ten% annual return on their funding, with Barber being accused of reassuring them “that their investments are protected and returns are assured,” the SEC claimed.
“Nevertheless, since BNZ was based, BNZ has not been worthwhile as a result of its investments – when Barber and Zimmerle truly invested – didn’t generate sufficient revenue to return the traders’ capital and pay the promised returns,” based on the SEC. Certainly, the defendants have Raised $ 6.9 million from traders from June 2019 to February 2020, however invested solely $ 2.7 million and generated lower than $ 5,000 in income from these investments. ”
The 2 are accused of taking investor cash to repay different traders in a Ponzi scheme, prosecutors mentioned.
“Barber and Zimmerle additionally paid off handsomely with investor cash, together with sending a whole lot of 1000’s of {dollars} to Barber’s agency Assured Revenue Options Inc., based on the SEC.
After March final 12 months, they raised one other $ 6.6 million whereas “deceptive traders about BNZ’s profitability and persevering with to make Ponzi-like funds to traders and beneficiant funds to themselves,” the SEC claimed.
The corporate invested $ 6.4 million of the $ 13.5 million traders in actual property, generated simply $ 300,000 in income, and used $ 1.7 million to focus on different traders within the alleged Ponzi scheme the SEC mentioned.
“And regardless of BNZ’s tiny income, BNZ has despatched greater than $ 1.6 million to (Assured Revenue Options) and greater than $ 700,000 to Zimmerle whereas paying for sure Barber and Zimmerle private bills, together with autos, meals and journey, “claimed the SEC.
Barber additionally failed to inform traders that the monetary trade regulator had banned him from working with a broker-dealer, prosecutors mentioned.
Prosecutors say the losses from the alleged plan quantity to about $ 9 million. Zimmerle admitted in his plea that he was retaining about $ 582,815 in investor funds, prosecutors mentioned.
Barber faces 4 fraud costs and two cash laundering costs.
