LONG BEACH, Calif. (KABC) -- A 33-year-old Long Beach man pleaded guilty to federal wire fraud charges Wednesday.
Jon Weldon James is accused of running a $33 million Ponzi scheme.
In a Los Angeles courtroom Wednesday, James admitted he defrauded more than 50 people who invested in his real estate-related offerings from late 2003 through August 2006.
James told his victims that he was using their money to invest in real estate, but in fact, he invested in only a few properties and made no profit from real estate investments.
He used funds from new investors to pay what he said were profits to his scheme's early investors.
Prosecutors say James also used investors' money for personal expenses, including his wedding, a recording studio and a production company.
The U.S. Attorney's office says he had losses of about $11 million.
James is set to be sentenced May 24. Prosecutors say he faces up to 20 years in federal prison.
In prison I have a feeling he's going to learn the definition of a "Ponzi Train."
The hard way.
Pun totally intended.
Recording studio? Maybe it was this jagoff...
ReplyDeletehttp://longbeachhousingblog.blogspot.com/2010/01/fun-while-it-lasted.html
Ugh, I just read the Fun While it Lasted post again. Pisses me off.
ReplyDeleteEl Bee, Not a comment on this thread, but I can't find your email link...
ReplyDeleteI noticed in a few blog entries that you cited building up equity, for example, so and so had been paying off their $180k loan for almost 8 years, so they should have 100k in equity built up.
That isn't quite how it works though. I took a 175k 30 year loan at 7% back in '99. I am closing on a 15yr refi next week. The payoff amount is around $139k for the old loan. I'm not sure if you knew that monthly mortgage payments are heavily skewed to interest in the begining, and then over time more and more goes against principal. So some of these short sale owners likely have far less equity than you thing, and that's assuming they took a traditional loan and not some bogus interest-only flavor.
By the way, is there a place to view your archives prior to '08? I'd get a kick out of reading some of the realtard vitriol from 2007 you had mentioned in some of the later entries.
-Rick
Hi Rick,
ReplyDeleteI removed the email address from your comment for privacy's sake.
Thanks for commenting. I'm aware that early payments mostly go to interest, I just like to provide a little balance. I think it's worth reminding people that some people do have equity and that can counterbalance the apparent "loss."
But you bring up a great point, which is a vast majority of SoCal bubble buyers--many of whom had interest-only or Option ARM loans--have very little equity.
In reality, I simply don't know everyone's situation. Some could have made extra payments, some might have had huge down payments, cash stockpiles from a previous sale, etc. I just don't want people to think selling a $400,000 house for $350,000 automatically means the seller "lost" $50,000 (plus commissions, natch).
Thanks for reading and we hope to hear more from you soon!
P.S. I don't have any archives other than what's on the blog. But I just realized I didn't have a "labels" section displayed (thought I did), so if you look under "Fan Mail" you should find some good stuff. Also check the comments sections of early 2008 posts.
heyyyyy! Oh, wait... I read that as 'Fonzi' scheme...
ReplyDelete