California Real Estate Fraud Report

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11
Apr

SEC charges investment firm with Ponzi scheme against Latino churchgoers

The Securities and Exchange Commission (SEC) has filed a complaint in federal court in Los Angeles charges that Diversity Capital, its Mexican affiliate Diversity Capital Bancorp de Mexico, Strong Capital Investments of Chula Vista and San Diego-based The Optimus Fund scammed churchgoing Latinos in Southern California counties out of more than $14 million in what was nothing more than a Ponzi scheme.

The SEC complaint in Los Angeles federal court alleges that none of the three men charged with securities fraud registered the securities they were selling, and none had registered themselves with the SEC as required.

Diversity Capital Investments is a Chula Vista firm that pitched monthly returns of 4 to 8.25 percent with low risk. Why did people fall for this?

The chief prosecutor, SEC attorney David van Havermaat, refers to these kind of Investment frauds as affinity scams because people of a certain background are targeted based on cultural, language or faith ties are commonly victims. [Note: another phrase for affinity scams is affinity fraud.] Says Van Havermaat,  “You’ve got someone who is trusted because they share some common characteristics with the victim, be it religion or ethnicity. Second, because of that trust, when the situation goes south, the victim is more likely to work things out with the ‘fraudster’ rather than go to the authorities.”

The victims in this sordid tale invested their life’s savings, insurance proceeds or in the case of one person, her real estate commission. As a result of the Ponzi scheme, many lost their homes and everything they owned.

Read the full article in the San Diego Tribune.

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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