March 8, 2011

Juan Rangel, 47 Sentenced In $30M Ponzi Scheme Case Specifically Targeting The Hispanic Community!

MyFoxLA channel 11
Man Sentenced In $30M Ponzi Scheme Case
written by Staff
February 14, 2011

Los Angeles - A Downey man whose financial fraud schemes preyed on blue-collar Latinos throughout the Southland was sentenced today to 22 years in federal prison for what a federal judge said was a case "close to my heart."

Juan Rangel, 47, who is already behind bars awaiting sentencing for a 2009 conviction for bribing a Bank of America branch manager, pleaded guilty last October before U.S. District Judge S. James Otero to one count each of mail fraud and money laundering.

In a three-hour hearing in Los Angeles federal court, about a dozen of Rangel's victims tearfully told Otero of losing their homes, their savings, and their health to a Ponzi scheme that took in nearly $30 million as well as a scam that preyed on homeowners facing foreclosure.

Patricia Arreola of Baldwin Park told the court she invested $50,000 with Rangel and lost it all. For the mother of five, the loss was especially tragic since she had received the money from the government after the death of her son, a Marine, in Iraq in 2007.

"This was sacred, this money, and he took it all," Arreola said. "He has no heart, no feelings, and he harmed so many people."

After imposing sentence, Otero called Rangel "a true economic danger to the community. ...It's so very sad that he would accept money from the mother of a fallen soldier, knowing how important that money was."

Rangel, a Mexican national who has been resident in the United States for more than 20 years, was indicted last year on charges that he and his Commerce-based company, Financial Plus Investments, recruited investors through Spanish-language newspapers, magazines, radio spots and infomercials.

Prosecutors said investors were promised guaranteed returns of 60 percent each year out of the profits from Rangel's real estate investments and his lending business.

Instead, Rangel used the victims' cash to make monthly mortgage payments on his $2.5 million home, to lease a Lamborghini and a limousine, and to buy cocaine, prosecutors said.

Assistant U.S. Attorney James A. Bowman showed the dozens of spectators packed into the courtroom pictures of Rangel's home, complete with marble- and gold-plated bathrooms and a built-in elevator.

One victim told the judge that since losing her home to Rangel's mortgage scheme, she has been living in a garage. Another said that since losing her home, she is being cared for by her 80-year-old mother.

Rangel showed no reaction to the victim impact statements. Given the opportunity to address the court, he blamed the economy and even his victims for the losses.

"It was never my intention to harm anyone," Rangel said, adding that in some cases his problems were caused "by all the debtors (that) did not pay us the money they owed us."

Otero repeatedly warned the victims that there was little likelihood any money would ever be returned.

"It's not likely you will receive restitution from Mr. Rangel," the judge said. "He came to court without a penny to offer you. He has made no efforts to attempt to return any monies to you."

Otero said the Rangel case "comes close to my heart," since he grew up in the blue-collar Hollenbeck neighborhood, just blocks from the downtown courthouse.

"I'm familiar with the hard work that most of you put forward to achieve the American Dream," the judge said. "He has stolen your dreams, your futures (and) your health, both emotional and physical."

Otero recommended Rangel be deported back to Mexico after he is released from prison. A restitution hearing was set for May 6.

According to a signed plea agreement with prosecutors, Rangel was expected to be sentenced to 15 years in prison, but Otero departed from the deal and added another seven years to the sentence. Outside court, Bowman told the crowd it was the victims' statements that made the difference.

In the mortgage fraud scheme, Rangel and others targeted Spanish-speaking homeowners who were at risk of losing their homes and offered to help them avoid foreclosure, Bowman said.

Rather than assist them, however, Rangel took titles to their homes and drained the remaining equity out of the properties, the prosecutor said.

As part of that scheme, Rangel arranged to sell the homeowners' properties, usually without their knowledge, to third-party straw buyers, according to Bowman.

He then applied for loans in the straw buyers' names and, using a variety of falsified documents, duped mortgage lenders into approving more than $10 million in bogus loans, the prosecutor said.

The indictment also charges Javier Juanchi, 42, of Sherman Oaks, a vice president at Financial Plus, and Pablo Araque, 40, who owns Downey-based tax preparation and bookkeeping company A-One Tax Pros.

Juanchi and Araque, who were charged in the mortgage fraud only, are scheduled to face trial in March before Otero.

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