Calif. men arrested in alleged $110M finance fraud
SANTA ANA, Calif. -- The ex-owners of a now-defunct real estate firm in Southern California have been arrested after an indictment alleging a Ponzi scheme that left their business bankrupt and investors out more than $110 million.
A U.S. attorney's statement says that 66-year-old Michael Stewart of Phoenix and 63-year-old John Packard of Long Beach were arrested Wednesday. Packard pleaded not guilty. Stewart is scheduled to be arraigned in Arizona later this week. It's not clear whether they have retained attorneys.
Each was charged with multiple counts of mail fraud, bank fraud and bankruptcy fraud.
In 1999 they co-founded Pacific Property Assets, which refinanced and resold apartment complexes in California and Arizona.
Prosecutors say after the housing market downturn the men started raising money from new investors to pay off old ones, and themselves.