PTA moms charged in Ponzi scheme

DIAMOND BAR - Two PTA moms were arrested at their Diamond Bar homes Tuesday for allegedly operating a scheme that defrauded victims out of millions of dollars.Maricela Barajas, 41, and Juliana Menefee, 50, were arrested following a six-month fraud investigation by detectives from the Commercial Crimes Bureau of the Los Angeles County Sheriff's Department. A third suspect, 51-year-old Eva Perez, was previously arrested by the Chino Police Department on fraud charges and is currently incarcerated. She is now facing additional charges from this case. Perez, Barajas and Menefee are accused of stealing millions of dollars from more than 40 people who thought they were investing their money in a legitimate business venture. The women claimed to have the exclusive right to sell Alta Dena dairy products at Disneyland, Disney hotels and to small retailers. They allegedly told investors they needed funds to grow the business and offered lucrative rates of return of up to 100 percent. The women assured investors their original investment was guaranteed, even if they did not earn the promised rates of return, authorities said. All investments were required to be made in cash. Approximately $14 million was collected during the scheme; about $10 was returned to investors to keep new money coming in, and the remaining was kept by the suspects. More than $1.5 million has been proven as actual losses to the victims, while $2.5 million has not been accounted for. Detectives speculate the women used the money for lavish vacations, expensive hotels, new cars and at casinos in California and Nevada. The investment scheme began to unravel when the women were pressed for payment by their investors. Perez, Barajas and Menefee organized informational meetings and attempted to pacify investors by explaining the delays in payment were a result of an internal audit of the business, authorities claim. Meanwhile, one of the victims reported the scheme to the Los Angeles County Sheriff's Department. The majority of the transactions took place at Perez's homes in Chino and Diamond Bar between 2008 and 2010. In order to get money, many of the victims took out second mortgages on their homes, maxed out their credit cards and "invested" their life savings. All transactions were done in cash and the victims losses ranged from $5,000 to as much as $208,000. Victims were given serialized receipts like those commonly available in office supply stores. All three women had been actively involved in the PTA at Armstrong Elementary School in Diamond Bar. They were successful in gaining the friendship and trust of investors during organized school events and social functions, authorities said. The known victims reside throughout Southern California, including Norwalk, Pico Rivera, Santa Fe Springs and South Gate. Victims were also located in Salt Lake City, Utah. "The victims are mostly typical, hard-working people. When they were interviewed by sheriff's detectives, their main reaction was to emotionally describe their embarrassment that they fell for this scheme," authorities with the Los Angeles County Sheriff's Department said in a press release. "They said they saw others making a lot of money and didn't want to miss out on the opportunity to make a better life for themselves and their families. They are in hopes that people who hear about what happened to them will look for the warning signs that they ignored, and not have this happen to them. They also made the mistake of investing in people they thought they could trust." None of the money has been recovered. Detectives think the suspects used it or lost it all through purchases and other ventures. The fraud is typical of a "Ponzi" or pyramid-type scheme where a fraudulent investment operation promises to pay large returns to separate investors. Payments, if made, are not from actual profit earned by the organization or business, but from their own money or money paid by subsequent investors. The scheme typically collapses when the promoters start having problems paying the promised returns, as in the case of this fraud scheme, detectives said. The scheme is named after Charles Ponzi, who became notorious for using the technique to defraud victims in the early 1920s. Perez, Barajas and Menefee could face up to 20 years in prison each in convicted of the 22 felony charges filed against them, including seven counts of grand theft and 15 counts of securities fraud. Perez pled guilty in San Bernardino County court last year to multiple felony counts of grand theft, where she orchestrated and conducted the same investment fraud scheme. She was sentenced to 11 years in prison and ordered to pay restitution to victims. Barajas and Menefee are being held in Los Angeles County Jail and were scheduled to be arraigned July 7.

********** Published: July 7, 2011 - Volume 10 - Issue 12