Posted on 11/23/2004 8:18:31 PM PST by Tumbleweed_Connection
An investment scheme that targeted Los Angeles' black community bilked at least 1,273 people of more than $25.7 million, triple the amount first believed, a court-appointed receiver said Tuesday.
Investors were sought through some of the area's largest black churches and at lavish sales events by two Riverside-based companies shut down earlier this month after federal regulators accused them of operating a Ponzi scheme.
There is at least a $15 million gap between the companies' assets and what they owe investors, receiver Robb Evans reported. Only $1.44 million is frozen in the companies' bank accounts.
A review of the companies' records and activities shows "the elements of a classic Ponzi scheme" with "the only source of funds to make payments to investors was from other investor funds," Evans reported.
On Nov. 4, the Securities and Exchange Commission shuttered Ohana International Inc. and Financial Solutions, both run by 44-year-old Christiano Hashimoto of Riverside.
Investigators said the scheme was in its early stages, but receipts from investors "grew rapidly," Evans said, from $1.3 million in May to nearly $6.3 million last month.
There was no answer Tuesday at Financial Solutions' office and Hashimoto's attorney did not immediately return a telephone message.
Investors were told they would be lending the money to government contractors and would see returns of 10 percent to 20 percent a month.
Sales events targeting investors included one at a Ritz-Carlton hotel that attracted nearly 500 people. The boxer Mike Tyson attended the event as guest of honor, the SEC said, while invitees were falsely told Magic Johnson and other black celebrities would attend.
The scam used some real federal contractors and other companies, but dramatically oversold the potential returns, the receiver reported Tuesday.
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