5 Charged for Investment Scam Involving 180 Victims

Allison Tussey —  September 21, 2011 — Leave a comment

Michael Bolden, 57; Christopher Jackson, 43; Victor Alvarado, 50; Nicholo Arceo, 38; and Erica Arceo, 43; all of Sacramento, California, have been charged with wire fraud and mail fraud for a real estate investment fraud scheme.

According to the indictment, the defendants were affiliated with Diversified Management Consultants (DMC), an umbrella for their “investment clubs” which, together, defrauded 180 victims out of approximately $26 million. The indictment alleges that the defendants induced people to invest their ordinary savings, tax-deferred retirement savings, and proceeds of “cash-out” residential loan refinancings. They told investors that their money would be used for purchasing property and building structures for a real estate venture.

In fact, victim money went to pay other investors’ bogus “returns” on investment and to pay for the defendant’s personal expenses, including luxury lifestyle expenditures. Jackson had been charged in an earlier indictment.

According to public records, in 1994, Bolden was sentenced by U.S. District Court Judge Edward J. Garcia  to 21 months in prison for conspiracy, loan fraud, and securities fraud following an earlier federal investment fraud prosecution.

This case is the product of an extensive investigation by the FBI. Assistant United States Attorney Matthew D. Segal is prosecuting the case.

If convicted, the defendants in these two cases face a maximum statutory penalty of 20 years in prison plus a fine of the greater of $250,000 or twice the gain or loss from the scheme. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. 

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Allison Tussey

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