|For Immediate Release
Case # 10SF0129
|Susan Kang Schroeder
Public Affairs Counsel
MAN ARRESTED FOR STEALING OVER $900,000
FROM INVESTORS IN PONZI SCHEME BY FALSELY PROMISING TO FLIP HOMES FOR A PROFIT
SANTA ANA – A man was arrested today for stealing over $900,000 from investors in a Ponzi scheme by fraudulently promising to buy, refurbish, and re-sell distressed homes for a profit. William Warren Baker, 57, Laguna Niguel, is charged with 13 felony counts of using untrue statements in the purchase or sale of securities and 13 felony counts of selling securities in issuer transactions without qualifications with sentencing enhancements and allegations for loss over $100,000, aggravated white collar crime over $500,000, property damage over $150,000, and property damage over $200,000. If convicted, Baker faces a maximum sentence of 32 years and eight months in state prison. The defendant is being held on $1 million bail and must prove that the money is from a legal and legitimate source before posting bond. Baker is scheduled to be arraigned Monday, March 8, 2010, in Department CJ1, Central Jail Court, Santa Ana. The time is to be determined.
A Ponzi scheme is when investors are offered high, short-term returns on investments, but instead of the investments generating actual income and legitimate profits, the money from the investors is kept for the benefit of the defendant or used to repay earlier investors. Baker is accused of exchanging investor funds for promissory notes or stocks without qualifying the investments with the California Department of Corporations, as required by law.
Between Jan. 20, 2006, and May 7, 2008, Baker is accused of embezzling over $900,000 from at least 10 investors that he met through church, friends, and other personal relationships. The defendant is accused of telling investors that their money would be used to buy and refurbish distressed homes, which he could then sell for a profit. Baker is accused of issuing unqualified stock certificates in exchange for investor funds.
The defendant is accused of failing to purchase any property to be renovated and flipped as promised to his investors. Baker is accused of instead purchasing a property for himself and transferring the property into a trust belonging to his son. He is accused of later transferring the property into a trust belonging to his wife. Baker is accused of using investor money for personal expenses or to pay back old investors from previous ventures.
Deputy District Attorney Marc Labreche of the Major Fraud Unit is prosecuting this case.