Earlier this week, a federal judge in Sacramento, California sentenced James Berghuis for operating a Ponzi scheme that bilked friends, family, and others out of over $2.7 million. Berghuis was found guilty of four counts of mail fraud, four counts of wire fraud, and one count of money laundering in connection with the operation.
According to U.S. Attorney Benjamin Wagner, Berghuis persuaded investors to take out home-equity loans to make investments from 2005 to 2008, claiming that he would use the funds to invest in real estate. He also offered several victims a deed of trust on his commercial property, promising each that they would be in second position on the title. However, Berghuis never used the money for his stated purposes and instead used funds from new investors to pay back earlier investors, the classic element of a Ponzi scheme, as well as to purchase luxury items for himself.
Berghuis would make a series of excuses to investors as to why he could not pay them back on the promised dates. Some victims lost their homes or continue to pay on mortgages they took out to make their investments with Berghuis.
On one occasion, Berghuis used a check acquired from an investor to purchase a $200,000 Mercedes Benz later on that same day.
The case resulted from an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.