Ponzi scheme lands woman in federal pen

A Southern California woman has been sentenced to five years in federal prison for an investment fraud that cost victims $6.1 million.
Clelia Flores, 43, was sentenced Monday in Los Angeles. Besides the jail time, she was ordered to repay 169 victims.
According to an SEC complaint filed in April, Ms. Flores targeted investors in the Hispanic-American community through referrals and testimonials by investors. Federal prosecutors say her company, Maximum Return Investments, promised risk-free returns of 25% — within 45 days, no less — on real estate, gold and other investments. The SEC said Ms. Flores’ firm informed investors that their principal would be ‘guaranteed safe.’ Indeed, marketing material from the firm said an investor’s principal was secured by a bank-endorsed guarantee and that the firm’s promissory notes indicated that all investments were insured.
Apparently, they weren’t. Of the $23 million she raised, Ms. Flores allegedly used $13 million to pay off earlier investors. The SEC claimed Ms. Flores spent $3.5 million for personal expenses, including the purchase of a new home. The regulator also claimed she dished out $1.5 million on investor money to run her firm – and to pay for a lavish party celebrating the firm’s purported success.
Ms. Flores pleaded guilty in May to wire fraud and other crimes. Federal regulators also have fined her company for violating securities laws.
[The Associated Press contributed to this article]

Related Topics: Fraud Charge Tracker