Friday, September 14, 2012

Former Placer Co. wealth 'guru' charged in huge Ponzi scheme -

Lawrence Leland "Lee" Loomis

SACRAMENTO, CA - A former Placer County wealth advisor who promised clients he could make them rich has been indicted in a $100 million Ponzi scheme.

Lawrence Leland "Lee" Loomis, 56, was the founder of Loomis Wealth Solutions and several related companies that the FBI and IRS said defrauded hundreds of investors and lenders in a multi-layered investment scheme that victimized more than 100 people.

Six Loomis associates are also named in the 50-count indictment, including Loomis' father-in-law, John Hagener, 76.

Loomis and Hagener were in custody Friday and were scheduled to make their initial appearance in federal court at 2 p.m.

The Sept. 6 indictment on mail fraud and wire fraud charges was unsealed Friday morning following a four year investigation.

The others named are Darren Fehst, Michael Llamas, Peter Woodard, Joseph Gekko and Dawn Powers.

Loomis pitched his investments at hotel seminars, in some cases convincing clients to liquidate their retirement savings and give the money to him.

Video obtained by News10 from a Sacramento seminar in 2007 offered an example of Loomis' pitch, in which he assured investors he would make them multi-millionaires.

"It's not get rich quick," Loomis told the audience.  "But the reality of it is it's get rich for sure."

Among the allegations is that Loomis lulled investors in his NARAS fund into thinking their money was safe by sending them false statements indicating a steadily-increasing balance.

Loomis' literature promised a 12% annual return.

Prosecutors said more than 100 people lost at least $7 million in the NARAS fund. 

Victims of a separate property investment scheme told News10 Loomis promised to cover their mortgage, taxes, insurance and homeowners dues by placing tenants in the properties they purchased.

In addition they were promised payments of several hundred dollars a month.

In a classic Ponzi scheme, payments to early investors are covered by new money brought in by subsequent investors.

The FBI said the Loomis scheme began collapsing in 2008 when the payments stopped.

One Sacramento-area woman, who asked not to be identified, said she and her husband bought four homes and condos in California, Arizona and Florida in 2007 and 2008.

She said three of the four were never rented and cash flow from the fourth failed to cover the expenses.  All four properties went into foreclosure.

The couple also lost $350,000 in retirement savings they invested in Loomis' NARAS fund.

The woman told News10 Loomis was extremely convincing while conducting his wealth seminars.

"This has really rocked our sense of good judgment.  We don't know who to trust," she said.

Loomis' Roseville offices were raided and his bank accounts seized in the summer of 2008.

Loomis later lost his luxury Granite Bay home to foreclosure and in 2010 he appeared to be trying to make a new start in Indiana.

A Website designer in Indianapolis said Loomis approached him to design a website to attract real estate investors.

A total of 16 other people linked to Loomis had previously been charged with varying degrees of fraud.

One of them, Christopher Warren, 30, fled the country aboard a private jet in 2009 after posting an online confession implicating Loomis Wealth Solutions in fraudulent activity.

Warren was later arrested trying to sneak back into the United States from Canada and was sentenced this week to 14 years in federal prison.

by George Warren,


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