California Attorney General announced Friday the arrest of Edwin G. Salazar, 34, of Downey, California, and Michael Z. Zuniga, 41, of Fullerton, California, in a $1.3 million Ponzi scheme that targeted Latino investors, many of whom were seniors.[IMAGE]
Salazar and Fullerton, who operated as OMEGA Investments Corp., were arrested on 57 counts of elder abuse, grand theft, and securities fraud. From January 2007 through June 2008, the licensed insurance agent issued more than $1.3 million in fraudulent securities to individual investors they befriended through their insurance business.
""The defendants defrauded investors with promises of guaranteed returns and even convinced some victims to re-finance their own homes in order to participate in the scheme,"" said Attorney General Harris said in an office release. ""What victims thought was a resourceful real estate investment only brought them losses and heartbreak.""[COLUMN_BREAK]
Salazar's bail was set at $100,000 and Zuniga's at $50,000. The case was investigated by Department of Justice Special Agent Debra Gard, along with the California Department of Insurance Los Angeles Investigation Division.
""These agents conspired to rip-off trusting members of their own community,"" Dave Jones, insurance commissioner said. ""Preying on senior citizens for financial gain is deplorable and it will not go unpunished.""
The scheme functioned by citing a strong track record and promising that their investments were secure and ""risk-free."" They targeted Latino investors, many of whom were seniors, and guaranteed a 15 percent return.
However, OMEGA ran like a classic Ponzi scheme by paying interest to previous investors from capital raised on new ones. They had never been buying or selling foreclosed property, making profit, or able to secure investments. Instead, they moved funds to personal use or other investments.
Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute crimes related to mortgages, foreclosures, and real estate.
This case is being prosecuted by Deputy Attorney General Ed Skelly.