Chula Vista man sentenced in Ponzi scheme and loan fraud case - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Chula Vista man sentenced in Ponzi scheme and loan fraud case

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SAN DIEGO (CNS) - A Chula Vista man who operated a Ponzi scheme and mortgage loan fraud that cheated more than 190 people out of more than $9 million was sentenced Friday to 51 months in federal custody.

Moises Pacheco, 42, was ordered back to court Nov. 18, when a final restitution figure will be set and he will be taken into custody. He pleaded guilty in March 2010 to conspiring to commit mail fraud, wire fraud and bank fraud.

According to court documents, Pacheco raised more than $14.7 million between 2005 and 2008 from more than 150 investors by promising to use investor money to purchase stocks and generate income from the sale of "covered call" stock options.

Instead of notifying his clients that the funds were not performing well, Pacheco paid prior investors' returns with new investors' funds, prosecutors said.

Additionally, Pacheco was a principal in the Real Estate Investment Group that was used to fraudulently obtain millions of dollars from investors by falsely promising to secure real estate investments with promissory notes and recorded deeds of trust, according to court documents.

In reality, the deeds of trust were either not recorded or improperly recorded, causing victims to lose their investments when the properties purportedly securing the notes were sold or foreclosed.

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