Fullerton Man Arrested on Suspicion of Bilking Investors

A twice-convicted Fullerton man was arrested Wednesday on suspicion of bilking at least 130 investors out of more than $15 million in a yearlong Ponzi scheme that promised huge returns for trading in offshore letters of credit.

Scott K. Yoshizumi, 39, faces 24 criminal counts of fraud and money laundering in a federal grand jury indictment that was returned Tuesday. He was ordered held without bail Wednesday as a flight risk and an “economic danger,” Assistant U.S. Atty. Michael Wilner said.

Yoshizumi’s attorney, Ronald Kaye, a deputy federal public defender, said he could not comment on the case.

According to the indictment, Yoshizumi persuaded customers to turn money over to his company, Concord Capital Inc., to invest in a trading program involving letters of credit and other financial paper of foreign banks. The alleged scheme ran from November 1999 through November 2000.

Yoshizumi told customers that they were making a “safe, lucrative and sophisticated investment” that would give them regular monthly payments of 2% to 4% on their investment--or 24% to 48% interest a year, the indictment alleges.

But the trading program was a “fiction made up by defendant Yoshizumi,” the indictment states, and he never used the money to purchase or sell any letters of credit.

Instead, it alleges, Yoshizumi operated a Ponzi scheme, paying interest to earlier investors with money from later investors, and used the excess to buy a house in Fullerton, luxury cars and other personal items.

The indictment also accuses him of lying to investors and failing to disclose that he had been convicted twice on federal fraud charges and that four employees had served “significant” prison terms for credit card fraud, armed bank robbery, drug trafficking and money laundering.

Yoshizumi is scheduled to be arraigned Monday. He is charged with seven counts of securities fraud, seven counts of mail fraud, three counts of wire fraud, six counts of money laundering and one count of criminal forfeiture.

If convicted on all counts, he faces a maximum sentence of 240 years in federal prison.