A federal grand jury indicted five California residents with running a real estate Ponzi scheme that defrauded victims out of over $26 million. A 27-count superseding indictment was returned against Michael Bolden, 57; Christopher Jackson, 43; Victor Alvarado, 50; Nicholo Arceo, 38; and Erica Arceo, 43; all out of Sacramento, California. All were charged with mail fraud and wire fraud.
According to the indictment, the defendants operated Diversified Management Consultants, which operated as an 'umbrella' for various investment clubs including Genesis Innovations and Equishare Capital. Potential investors were induced to turn over their savings and retirement funds, and promised that their money would be used to purchase property and building structures for a real estate venture. In total, over $26 million was invested by more than 180 individuals. Yet, instead of purchasing real estate, investor funds were used to pay returns to other investors in classic Ponzi scheme fashion and to fund the defendants' luxury lifestyles.
If convicted of the charges, each defendant faces up to twenty years in federal prison and a fine of up to $250,000.
A copy of a Justice Department Press Release announcing the indictment is here.