3 men charged in $200M Ponzi scheme

May 22, 2009 11:53:55 PM PDT
At least a 1,000 people may have been scammed out of $200 million. On Friday, two Northern California men are in jail accused of running a Ponzi scheme. Authorities say it started back in 1997 and involved a network of 55 business ventures. Many of the alleged victims have been wiped out.

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Investors were promised steady returns and they got them, averaging about 12 percent, until the whole operation fell apart. Many people's life savings are now gone, altering retirement plans along the way.

When Susan Pricco of Hercules started investing with AREI Ventures nine years ago and thought there was nothing to worry about.

"Pleasant office staff, their letterhead looked fine. They were known in the community," said Pricco.

But authorities say Pricco is now among the thousands of people who've been bilked by Jim Koenig of Redding, Gary Armitage of Healdsburg and Jeffery Guidi of Santa Rosa.

The men are accused of peddling real estate projects around the state, including one to build a golf course development near Mountain House in San Joaquin County. Investigators say investors were promised double digit returns, but most of the money went to paying off new investors. California Attorney General Jerry Brown (D) says it was a $200 million Ponzi scheme.

"We know they're going to go to jail for a long time, if we can prove our case and I think we can. This was a classic scheme of luring people in, give them a sense for a few years that they've got a great investment, and then the whole thing collapses," says Attorney General Brown.

Until their arrest, the men had lavish lifestyles. Their properties included the 80-acre Brigadoon Castle in Igo, California. Pricco says she's among the lucky ones. Unlike others she's talked to, she didn't lose her entire life savings, but plans of retiring next year won't be happening.

"Our ideas of when we can retire have changed dramatically. And until time goes on a little bit more we don't exactly know what retirement age will be for us," says Pricco.

Authorities have charged the defendants with multiple counts of securities fraud and residential burglary. If convicted on all counts, each could face more than a 100 years in prison.

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