Irvine Firm Accused of Ponzi Scheme

Federal regulators accused MicroWest Industries Inc. of fraud, saying the Irvine-based company raised more than $4.25 million from unsuspecting investors through promises of high returns in a tele-medicine project. The Securities and Exchange Commission, in a lawsuit filed in federal court in Los Angeles, said MicroWest had promised investors their money would be used to make and market computer equipment to transmit medical images, among other things. But the company, the suit alleges, instead engaged in a Ponzi scheme, using most of the money to pay previous investors and to cover company expenses. Investors were promised returns as high as 25% in less than two months, SEC officials said. Attorneys for the company and its staff denied the fraud allegations.