For 30 years, David Nilsen operated Cedar Funding, the regulated mortgage fund that pooled people's money and invested it in real estate deals.
"We invested $300,000, $100,000 of it was my wife's IRA," investor Robert Trahan said.
For their money, investor were promised, and for years received, a 10.75 percent return. Then the real estate market went south and around January, more than 1,000 investors stopped getting paid.
"Yes, he was running a Ponzi scheme and I think it was fraud and I think he was breaking the law," investor Charlene Winstead said.
Many investors agreed with Winstead, as did Todd Neilson, a highly respected court appointed trustee for the now bankrupt Cedar fund. Neilson said Nilsen was running a complex scheme that paid off old investors with new money and no real property to back it up.
"We're not lying to you, this is bad," Neilson said to investors Thursday at a meeting in Monterey. "How much are we going to get back for you, I'm not sure."
Neilson said Nilsen is responsible for $183 million in debt and that Cedar Funding destroyed its electronic records the day before it filed for bankruptcy.
"We have rarely seen the degree of mess and disarray and complete lack of proper documentation of these investors' investments," trustee attorney Cecily Dumas said.
Nilsen showed up to the creditors' meeting Thursday, but he refused the trustee's request to testify under oath and refused to answer ABC7's questions.
After decades in business, there were still some believers who said the downfall of Cedar Funding was not Nilsen's fault.
"I believe in the man's integrity and I really don't believe he did it to do wrong," investor John Hayworth said.
As the trustee tries to figure out whose money went where and what is left, federal and local authorities are investigating Nilsen for fraud. But for now, he is allowed to return to his home built with investor money. Hundreds are left with much less.
"I invested just about all my savings and now all of a sudden I'm living on my Social Security, which is not very much," investor Pierre Vercammen said.
The accounting process could take months to sort out, if not years.