Brothers accused in Ponzi scheme
LOS ANGELES - A federal grand jury returned an indictment May 20 charging two brothers in connection with a Ponzi scheme that recruited victims using advertisements that indicated investments were connected to the Economic Stimulus Plan.Ruben Juan-Gonzalez, 32, of West Covina, and his brother, Rosendo Juan-Zaragoza, 27, of Los Angeles, are accused of operating the $3.6 million Ponzi scheme that defrauded approximately 160 investors in Los Angeles and the Southern California region. The indictment charges Gonzalez with conspiracy, three counts of mail fraud, four counts of wire fraud, two counts of money laundering and one count of using a false social security number. Zaragoza is charged with a single count of money laundering. The indictment alleges that Gonzalez and an unnamed co-conspirator operated the scheme out of an office in West Covina under the names New Golden Investments Group and NGI Group. Gonzalez allegedly told investors he would invest their money in foreign currency and commodities, including gold and silver, real estate developments and precious metal mines in Mexico. Investors were promised annual returns of anywhere from 60 to 120 percent. Investors were also told that the investment program was connected to the American Recovery and Reinvestment Act of 2009, also known as the Economic Stimulus Plan. Gonzalez allegedly invested only "a small portion" of investors' money into unprofitable ventures. Approximately $900,000 of investor money was used for personal expenses, including the lease of a luxury Mercedes-Benz S55, and the purchase of gold and diamond jewelry, including Rolex watches. Gonzalez filed for bankruptcy in 2005 and was deported in 2006. He was previously arrested in connection with an immigration violation. Zaragoza was arrested last week on an arrest warrant for the money laundering charge. He is accused of withdrawing the last remaining investor money from one of the accounts. If convicted on all charges, Gonzalez faces a maximum sentence of 175 years in prison. Zaragoza can receive up to 10 years in prison. They are scheduled to be arraigned June 1.
********** Published: May 28, 2010 - Volume 9 - Issue 6