A San Diego man who swindled investors out of $26 million was sentenced to ten years in federal prison. Matthew "Beau" La Madrid, 44, had pled guilty in January to several charges, including conspiracy to commit mail fraud, wire fraud, bank fraud and conspiracy to commit money laundering. His brother, Lance La Madrid, also pled guilty to mail fraud and is awaiting sentencing along with several other co-defendants.
From 2004 to 2008, La Madrid operated "Plus Money Return Premium Funds" that purported to engage in covered-call stock option trading yielding above-average returns to investors. To convince investors that the operation was legitimate, La Madrid mailed fictitious monthly account statements depicting appreciation in investors' accounts. Instead, a large amount of investor money was used to make monthly payments to earlier investors and fund a lavish lifestyle that included luxury cars, art, and gambling. La Madrid also was a principal in several other companies, Real Estate Investment Group and E&M Property Management, which sold promissory notes to investors supposedly secured by deeds of trust in real estate investments. Instead, these deeds were never recorded, and investors' notes were rendered worthless when the properties were sold.
La Madrid was also ordered to pay $23.5 million in restitution to defrauded investors.