Conman Found Guilty of Investment Fraud Scheme

admin —  January 21, 2010 — 1 Comment

Milton Retana, 46, Huntington Park, California, who preyed on Spanish-speaking investors with promises of hefty returns in the real estate bubble has been found guilty of federal charges for bilking more than 2,000 victims out of more than $62 million. Retana was convicted of six counts of mail fraud and one count of making false statements to government agents who were investigating the case.

As previously reported on Mortgage Fraud Blog, Retana began soliciting investors in 2006 through his company, Best Diamond Funding, by telling them that their money would be used to buy and sell real estate. Best Diamond Funding solicited money through advertisements in Spanish-language magazines, on the Internet, and during weekly investment seminars at locations across Los Angeles, California. The investment seminars often had as many as 300 potential investors and incorporated religious messages. Retana guaranteed returns as high as 84 percent each year, claiming that he would purchase properties in bulk at below-market prices and immediately sell them for a profit. However, records obtained by federal investigators showed that Retana used only a tiny fraction of the victims’ money to purchase real estate and that his company was actually losing money.

During the trial, several victims testified that they mortgaged their homes and drained their retirement accounts because they believed Retana’s promises that their
investments would be safe. The victims who testified at trial were largely from working-class families in East Los Angeles, California and they included a stone mason, a long-haul truck driver, and a roofer who was also a pastor at his local church. Retana’s scheme was almost uncovered in the summer of 2008, when the California Department of Real Estate audited his company. But Retana stymied that investigation by ordering his employees to hide all of the investor files at the back of his wife’s religious bookstore, La Libreria Del Exito Mundial. His scheme was disrupted in October 2008, when federal agents from the United States Postal Inspection Service and the Federal Bureau of Investigation executed search warrants on the offices of Best Diamond Funding and the bookstore. During those searches, agents found $800,000 in cash stashed in Retana’s desk, as well as another $3.2 million in cash hidden in the back of the bookstore. The FBI also seized another $8 million from Retana’s bank accounts.

Soon after the execution of the federal search warrants, agents interviewed Retana, who lied about how much money he had received from the investors and claimed that he could pay all of them back. Retana was later secretly recorded telling a Best Diamond employee not to tell the government how much money Best Diamond had received from the investors.

Following a week-long trial in United States District Court, jurors deliberated for less than an hour on before convicting Retana of charges that carry a potential penalty of 125 years in federal prison. Dozens of victims were in court to hear the announcement of the guilty verdicts.

Retanais scheduled to be sentenced by United States District Judge R. Gary Klausner on April 26.

This case is the result of an investigation by the United States Postal Inspection Service and the Federal Bureau of Investigation.

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One response to Conman Found Guilty of Investment Fraud Scheme

  1. A Concerned Citizen January 22, 2010 at 5:34 am

    Sad to see that people can prey on others using their “religious” affiliations as a tool. This man, and his wife if she knew about it and helped, should spend the rest of their lives behind bars, just like Madoff. Nodoby can really put a price on the suffering that these victims have experienced, and let’s not forget what these families endured when they found out everything had been stolen from them: fights, divorce, depression, countless sleepless nights, spousal abuse, suicidal tendencies, even a heart attack. It’s amazing what we have seen and learned as a result of mortgage fraud.

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