Was Irvine house-flipping business a Ponzi scheme?

A co-owner of a real estate firm based in Irvine and Long Beach set up a Ponzi scheme to pay off old investors while continuing to recruit new ones for a plan to flip distressed apartment buildings during the Great Recession’s housing collapse, a federal prosecutor told jurors.

However, Michael J. Stewart’s attorney told jurors his client was innocent and he thought his plan was a financially prudent one because homeowners who lost their property in foreclosure would have to turn to renting apartments Tuesday. Defense attorney Kenneth Miller also placed the blame for the company’s failure on co-defendant John Packard.

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Rachel Dollar

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