Attorney General Kamala D. Harris Announces 20 Year Prison Sentence for Perpetrator of $17 Million Ponzi Scheme
- Created on Monday, 23 June 2014 20:41
- Written by IVN
San Francisco, California - Attorney General Kamala D. Harris and Sonoma County District Attorney Jill Ravitch today announced that defendant Aldo Joseph Baccala, who ran a Ponzi scheme that defrauded victims more than $17 million, was sentenced to 20 years in state prison and ordered to pay a fine of $6.4 million at a hearing today in Sonoma County.
“This fraudulent investment scheme cheated dozens of elderly investors out of millions of their hard-earned dollars,” Attorney General Harris said. “The dedicated investigators in our Financial Fraud Section, along with our local partners, will continue to protect California’s investors and consumers by bringing perpetrators like him to justice.”
“Along with the Attorney General’s Office, our office expended incredible resources in order to bring this scam artist to justice,” District Attorney Jill Ravitch said. “The scale and scope of this man’s fraud on unsuspecting investors is staggering. That so many of his victims lost their livelihoods, their homes and their retirement savings, to this man’s scheming and greed is beyond tragic. This was not just a fraud he perpetrated, but a crime against their futures and the emotional toll is incalculable. Thus, we believed his loss of liberty should be in proportion to their loss.”
Baccala was arrested in June of 2012 and charged with grand theft, securities fraud and elder abuse. On March 12 of this year, Baccala entered no contest pleas to 140 counts and admitted to excessive taking and white collar enhancements. The case was jointly prosecuted by both the Attorney General’s Financial Fraud and Special Prosecutions Section and the Sonoma County District Attorney’s Office.
Baccala used his Petaluma-based company, Baccala Realty, Inc., to solicit funds from victims, urging them to invest in ventures in California and other states, such as assisted living facilities, a car wash and other businesses with a promise of a return of monthly payments at an annual rate of 12 percent. He issued promissory notes stating the investments were either secured with real property or were designated for a particular use.
Many victims of the Ponzi scheme were elderly and had known Baccala and his family for many years.
Though he solicited investments in more than 100 notes between 2004 and 2008, Baccala did not own the facilities and his company could not provide any kind of return for those who purchased the promissory notes. Instead, Baccala used the solicited money for his own personal, unsuccessful stock market bets. His company eventually lost over $7 million and, when it collapsed, it had almost $17 million in promissory notes outstanding.
Consumers should exercise caution with investments that seem too good to be true and contain promises that cannot be verified or authenticated. Consumers may report suspected fraud or elder abuse to the Attorney General’s Office here: https://oag.ca.gov/bmfea/reporting.