West Covina woman gets 9-years in prison for $7 million Ponzi scheme

LOS ANGELES — A West Covina woman received a 9-year prison sentence Monday for running a Ponzi scheme in which she defrauded about 150 victims out of nearly $7 million, authorities said Tuesday.
Guadalupe Valencia, 47, was sentenced by United States District Judge S. James Otero and ordered to pay $5.2 million in restitution, U.S. Attorney’s Office spokesman Thom Mrozek said in a written statement.
She pleaded guilty last December to two counts of mail fraud, two counts of wire fraud and two counts of tax fraud.
Through offices of a Downey companies she called Real Estate & Loan Consultants and R.E. Equity Group, Inc., Valencia solicited investments from investors promising large and timely returns, Mrozek said.
“Beginning in 2001 and continuing through 2009, Valencia promoted two types of investment pools, with one purportedly funding loans to purchase real estate, and a second purporting to fund short-term loans to businesses,” Mrozek said.
“Valencia admitted that she falsely told investors that their investments were fully secured, backed by deeds of trust on valuable real estate, as well as promissory notes that equaled ‘money-back guarantees,’” he said.
“When she pleaded guilty, Valencia admitted that the investments she promoted did not generate any profits and that she used newer investor funds to pay investors,” Mrozek said. “Further, Valencia admitted that she had provided the victims with worthless promissory notes she had created.”
Valencia stole $6.9 million dollars, and paid $1.7 million of the money back to investors, officials said.
The investigation was carried out by the IRS and the FBI.

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