This is a big one……watch out!
REDDING, Calif. — A man accused of cheating North Coast residents out of hundreds of millions of dollars in what prosecutors characterized as one of the largest real estate Ponzi schemes in California history has been convicted by a Shasta County jury.
James Stanley Koenig, of Redding, shook his head and rubbed his forehead as the verdicts against him were read on Monday, the Record Searchlight of Redding reported (http://bit.ly/16zpZTZ).
Prosecutors said Koenig and two accomplices bilked 2,000 investors out of $250 million. Many of the victims were retirees who lost much of their life savings.
Koenig, 60, accused of being the architect of the Ponzi scheme, was convicted on 35 of 36 felony counts, including securities fraud and two counts of first-degree burglary. He faces about 50 years in prison and is scheduled to be sentenced on June 11.
Gary Armitage, 62, was sentenced to 10 years in prison earlier this year after pleading no contest to conspiracy to commit a crime, fraud and sale by false statement. Jeffrey Guidi pleaded guilty to lesser charges and avoided prison time.
Prosecutors said the three men sold real estate investments, promising low-risk returns. But many of the projects faltered or were never finished. Still, the men continued to raise money from investors, using it to pay off earlier investors, according to prosecutors.
Koenig did not disclose that the company had defaulted on loans for some of the properties in its portfolio and also did not disclose his 1986 federal fraud conviction, prosecutors said.
The men were arrested after a 17-month investigation.