The investors are devastated -- more than 2,000 of them lost over $700 million in real estate funds. They doubted they would ever get their money back, but at least, they wanted the Ngs to face serious criminal charges.
In the plea deal the men pleaded guilty to "structuring transactions for the purpose of evading the reporting requirement" -- keeping cash withdrawals under $1,000 to avoid detection.
Walter Ng, 84, will serve five years of probation and no prison time. Kelly, 57, will serve time in prison -- the guidelines call for at least 2.5 years, but that will be determined at a hearing in March.
The investors say it doesn't seem like justice.
"This seems like pulling Bernie Madoff over for jaywalking and getting him on jaywalking as opposed to what happened," investor John McGuire said.
"There have been suicides about it, at least one and it's shocking and really, really sad," investor Nancy Brandt said.
"There should be a real punishment here involved because a lot of people go to prison for very minor cases compared to this," investor Ben Leal said. "He's sort of getting off scot-free and I don't think it's right."
This comes after a massive investigation by the FBI -- more than two years and hundreds of interviews. Prosecutors apparently let the statute of limitations run out on the more serious charge of securities fraud.
"There were a lot of blatant actions that could have been brought to light and never were, and unfortunately at this point, it's too late," investor Steve Brandt said.
Investors have filed a class action lawsuit against Wells Fargo for its role in the Ng investment firms. The SEC has a civil case against the Ngs -- a fine is possible there. Walter Ng is still going through a bankruptcy -- the trustee has sold off his cars, jewelry and a membership in the Crow Canyon Country Club. That process will continue until the end of next year.
So many investors lost their life savings, their homes -- others lost more.
"We invested the money that we received in a wrongful death suit when our son died and we used that money to fund a program at children's hospital and that money vanished," Burt Kurtin said.
After the Bernie Madoff scandal, there is a new IRS rule that lets investors write off their losses. But, the Ng's charge is apparently not serious enough, so these investors may not qualify. As one IRS source told the I-Team, there will be a lot of angry investors.
