A federal jury recently convicted a Sacramento, California man for his role in a massive Ponzi scheme. James G. Berghius, 41, was convicted on four counts of mail fraud, four counts of wire fraud, and one count of money laundering in furtherance of a Ponzi scheme he had been operating.
According to a press release from the U.S. Attorney’s Office for the Eastern District of California, evidence presented at trial indicated that between 2005 and 2007 “Berghuis orchestrated a Ponzi scheme in the Sacramento area defrauding family members, friends, and other acquaintances of more than $2.5 million. Berghuis convinced some investors to take out home-equity loans to make their investments. Berghuis promised investors that he would use their money to invest in hard-money loans, real estate transactions, or the purchase of real estate franchises. He also offered to several victims a deed of trust on his commercial property, promising each that they would be in second position on the title.”
Instead of disbursing any legitimate returns on the investments, Berghius paid some investors with other investors’ monies, as well as used funds for his own use. Among the luxury items he acquired for himself with the investment monies included several Mercedes Benz cars, one of which cost more than $200,000 and which he had purchased by signing over a check he had been given that same day by an investor.
Berghius is scheduled to be sentenced on January 13, 2014. He faces a maximum statutory penalty of 20 years in prison for mail fraud and wire fraud and 10 years in prison for money laundering.