Orange County District Attorney
Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701
For Immediate Release
Susan Kang Schroeder
MAN SENTENCED TO 10 YEARS IN PRISON FOR STEALING OVER $900,000 FROM INVESTORS
IN PONZI SCHEME BY FALSELY PROMISING
TO FLIP HOMES FOR A PROFIT
*Defendant also stole $6,100 in social security benefits from
his 82-year-old missing-person mother
SANTA ANA – A man was sentenced today to 10 years in state prison 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, 59, Laguna Niguel, pleaded guilty May 20, 2011, to 13 felony counts of using untrue statements in the purchase or sale of securities and one felony count of grand theft from the United States Social Security Administration (SSA) with sentencing enhancements and allegations for loss over $100,000, aggravated white collar crime over $500,000, and property damage over $150,000. In addition to his 10 year sentence, the defendant has been ordered to pay over $900,000 in restitution and over $1.8 million in State fines.
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.
Between Jan. 20, 2006, and May 7, 2008, Baker took over $900,000 from at least 10 investors that he met through church, friends, and other personal relationships. The defendant told investors that their money would be used to buy and refurbish distressed homes, which he could then sell for a profit. Baker issued unqualified stock certificates in exchange for investor funds.
The defendant failed to purchase a property to be renovated and flipped as promised to his investors. Baker instead purchased a property for himself and transferred the property into a trust belonging to his son. He later transferred the property into a trust belonging to his wife. Baker used investor money for personal expenses or to pay back old investors from previous ventures.
In January 2009, Baker’s 82-year-old mother Sara Jo Mowery went missing. The Orange County Sheriff’s Department (OCSD) began investigating her disappearance and uncovered the Ponzi scheme in the course of the investigation. Following a lengthy investigation into the fraud, Baker was arrested in March 2010.
While Baker was in custody for the Ponzi scheme, OCSD found that the defendant has been stealing from SSA. Baker had set up a previously undiscovered joint bank account Mowery containing social security benefits intended for his mother. After his mother’s disappearance, Baker