Posted on 05/26/2006 7:26:46 PM PDT by NormsRevenge
SANTA ANA -- More than 50 former investors packed the courtroom Friday at the sentencing hearing for an Orange County man charged with running a $311-million fraud scheme over nearly two decades.
Many were expected to testify against James P. Lewis Jr., who faces up to 30 years in prison for defrauding about 1,600 investors.
Lewis, 59, pleaded guilty to one count of money laundering and one count of mail fraud last October after he was arrested in Houston in 2004 following a nationwide manhunt.
Prosecutors agreed to drop 12 of 14 counts in exchange for the pleas.
During the hearing, federal prosecutors and Lewis's attorney argued about the value of the net loss, which is a key element in deciding his sentence.
Brick Kane, the court-appointed receiver for Lewis's holdings, testified that Lewis took in $311 million between 1985 and 2003.
U.S. District Judge Cormac J. Carney asked how Lewis could keep up his scheme for nearly two decades.
"As long as you're able to raise money and keep paying the promised annual or monthly payments, you can keep going until you implode," Kane said. "And Mr. Lewis was about to implode when he was arrested."
Lewis, who wore a prison jumpsuit and was shackled at the wrist, was expressionless during the testimony.
Lewis told investors he was earning returns of 18 percent to 40 percent by leasing medical equipment, financing purchases of medical insurance, making commercial loans and buying distressed businesses that he reorganized and sold.
But prosecutors alleged that instead Lewis was using money from new investors to pay off the original ones -- something known as a Ponzi scheme.
Kane testified that some early investors did receive money back, leaving the total loss at $156 million.
Defense attorneys, however, have argued that the net loss to investors was much lower.
The company that is liquidating Lewis's property holdings issued a report last year that he lost $35.5 million in unprofitable businesses,$22 million in the foreign currency market and spent at least $15 million on his wife, two girlfriends and their families.
When he was arrested, Lewis was carrying $20,000 in cash, his passport, bags of clothing and maps of Mexico and Mexican cities and a note reminding him to disguise himself by wearing a hat and glasses, growing a goatee and losing 25 pounds, according to court documents.
I thought that somebody finally realized that Socialistic Insecurity was nothing but a Ponzi scheme.
http://www.usdoj.gov/usao/cac/pr2004/014.html
February 4, 2004
OPERATOR OF LONG-RUNNING PONZI SCHEME IN ORANGE COUNTY
INDICTED ON FEDERAL FRAUD, MONEY LAUNDERING CHARGES
James P. Lewis Jr., who ran Financial Advisory Consultants, claimed to have nearly $814 million under management - but had only $2 million in bank
$15 million on women ? I didnt think they cost that much
I thought it was about Social Security, too, until I read the amount involved. It's trifling compared to what FDR's brainchild has stolen from us all.
>>>>>Financial Advisory Consultants<<<<
Remember when we were looking into the viatical fraud connection with the Terri Schiavo news?
This group, Financial Advisory Consultants, came up connected with viatical fraud schemes in Florida.
Link that explains viatical fraud:
http://www.freerepublic.com/focus/f-chat/1550144/posts?page=5#5
Chasing the death dividend
That's nothing. The federal government's been running their fraud scheme since he '30's and they've ripped off the taxpayers for trillions.
And yet congress gets away with the same sort of scheme with regard to social security.
Ping.
1st thing I thought of when I saw the story?
$311 million -- that's nothing.
The CEO of EXXON gets that and $80 million more than that as a parting gift.
Me, too--I thought they might have tried FDR posthumously.
That was over two months, not just one, so it works out about right.
This guy pales compared to the mastermind of the largest Ponzi scheme of all times....FDR. Social Security is a multi-trillion dollar Ponzi scheme that will never end.
Heck, I have heard estimates that the gReat Society alone cost us at least 6 trillion and that is likely a conservative estimate, add onto that all the other social programs, you're talking some major dinero.
you mean the man that invented social security if finally being brought to justice?
It's always ironic when some people are prosecuted for doing something, while other people are voted into office for doing the exact same thing.
Yeah, but I'm wishing now I'd bought some XOM a couple of years ago.
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