City News Service is reporting Wednesday that a 33-year-old Long Beach man who operated ventures he used to solicit money with false claims of profitable investments in real estate pleaded guilty to a federal wire fraud charge.
Jon Weldon James pleaded guilty late Tuesday to the federal offense related to his Ponzi scheme that collected more than $33 million from his El Segundo-based company that operated under a series of names, including J.W. James and Associates, Inc., and The Cloaking Device, Inc.
Appearing before U.S. District Judge R. Gary Klausner in Downtown Los Angeles, James pleaded guilty and admitted he defrauded more than 50 people who invested in his real estate-related investments from late 2003 through August 2006.
James offered his investments through face-to-face meetings that included hosting presentations at restaurants, where he urged victims to invest their savings or money from their individual retirement accounts, the U.S. Attorney's Office said.
While James told victims that he was using their money to invest in real estate, and sent account statements that purported to show profits to some investors, James invested in only a few properties and made absolutely no profit from any real estate-related investments, prosecutors said.
However, in the hallmark of a Ponzi scheme, James used newly received funds to pay "profits" to early investors.
James also used investor money for personal expenses, which included his wedding and an investment in a recording studio and production company called On the Ball Entertainment, according to prosecutors.
After taking about $33 million from investors, repaying some investors and spending millions on personal and business expenses, James' illegal conduct incurred losses of roughly $11 million, the U.S. Attorney's Office said.
James is scheduled to be sentenced by Klausner on May 24, at which time he faces a statutory maximum sentence of 20 years in federal prison, prosecutors said.
Jon Weldon James pleaded guilty late Tuesday to the federal offense related to his Ponzi scheme that collected more than $33 million from his El Segundo-based company that operated under a series of names, including J.W. James and Associates, Inc., and The Cloaking Device, Inc.
Appearing before U.S. District Judge R. Gary Klausner in Downtown Los Angeles, James pleaded guilty and admitted he defrauded more than 50 people who invested in his real estate-related investments from late 2003 through August 2006.
James offered his investments through face-to-face meetings that included hosting presentations at restaurants, where he urged victims to invest their savings or money from their individual retirement accounts, the U.S. Attorney's Office said.
While James told victims that he was using their money to invest in real estate, and sent account statements that purported to show profits to some investors, James invested in only a few properties and made absolutely no profit from any real estate-related investments, prosecutors said.
However, in the hallmark of a Ponzi scheme, James used newly received funds to pay "profits" to early investors.
James also used investor money for personal expenses, which included his wedding and an investment in a recording studio and production company called On the Ball Entertainment, according to prosecutors.
After taking about $33 million from investors, repaying some investors and spending millions on personal and business expenses, James' illegal conduct incurred losses of roughly $11 million, the U.S. Attorney's Office said.
James is scheduled to be sentenced by Klausner on May 24, at which time he faces a statutory maximum sentence of 20 years in federal prison, prosecutors said.
Great post!