California Man Convicted in $250 Million Ponzi Scheme
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California Man Convicted in $250 Million Ponzi Scheme

On May 13, 2013 a federal jury came back with a guilty verdict against a California man for devising an enormous Ponzi scheme that defrauded investors out of more than $250 million. Sixty-year-old James Stanley Koenig was convicted of thirty-five out of thirty-six criminal charges that prosecutors imposed on him. Koenig was detained awaiting his sentencing on June 11, 2013 and might have gotten a prison term of equal to fifty years.

Koenig operated Asset & Estate Investment Company (AREI) together with fifty joined corporations, informing would-be investors that focused on senior housing centers. Starting in 1997, AREI regulated over twenty senior housing and residential assisted-living centers, signifying that they were appropriate as a safe and lucrative medium for tax-sheltered property interactions. Subsequent to buying an assisted living facility, Koenig would then sell proprietor shares in the property to investors. Over 1,000 victims would ultimately put a lot of money in with Koenig.

Then again, while Koenig signified that investor finances and facility proceeds were invested again back into the facilities, this was false. As an alternative, Koenig utilized investor finances to compensate income to present investors, in addition to financing a lavish existence that he and two accomplices benefited from. This existence consisted of an eighty-acre castle estate, a Lear jet, lavish homes, and expensive cars.

While investigators accused that AREI was bankrupt no later than May 2007, Koenig resumed introducing new investors founded on guarantees of dishonest productivity. Following an investigation, in 2009, criminal authorities took Koenig into custody and indicted him with seventy-seven criminal charges—forty securities fraud counts and thirty-seven residential-burglary counts that were maintained on Koenig’s admission into investor’s homes to persuade them to put money into his scheme. Investor shortfalls were approximated at more than $200 million.