8 Held in Pyramid Scheme That Stole From Thousands

Eight people have been arrested on suspicion of running a pyramid scheme that bilked thousands of mostly working-class Latinos of at least $2,000 each, authorities said.

Mercedes Navarrete, 54, and her husband, Felix Maganna Navarrete, 70, who run the Panorama City-based company La Luz de Oro, and six other suspects were arrested Thursday on 28 theft charges. The Navarretes also were arrested in April, but no charges were filed then.

The Navarretes, their daughter, Joan Frederick, 30, and associates Pedro Miramontes, 51; Alejandra Nunez, 39; Rolando Soza, 46; Juan Alvarado, 45; and Jose Garcia, 44, were taken into custody at various sites in Los Angeles and Ventura counties, said Det. Gene Arreola of the Los Angeles Police Department’s Financial Crimes Division.

All were held overnight at Van Nuys jail and Parker Center in lieu of $1-million bail each, Arreola said. They could be arraigned next week.

The charges stem from what police describe as a “complex endless chain scheme” that offered the promise of new cars and homes. Of the 25,000 members, thousands invested at least $2,000 each, authorities said. One man reported he had lost $30,000, Arreola said.

Calls to La Luz de Oro were not answered. Michael C. Carney, Felix Navarrete’s lawyer, did not return calls and Mercedes Navarrete’s lawyer, Jeffrey Sklan, was on vacation.

Although most of the alleged victims are believed to be in Los Angeles County, Arreola said chapters of the club are active outside the county, including in Las Vegas and Mexico. Arreola said the multilevel scheme is pitched with religious overtones at Spanish-language seminars that draw as many as 1,000 people.

Police said participants paid $75 to join the club. Members who invest $3,800 and sign up at least seven new members are eligible for the “auto program,” Arreola said.

Some members drove off car lots in high-end sport utility vehicles under the mistaken belief that La Luz de Oro would make payments, Arreola said. Twenty vehicles have been repossessed, police said.

La Luz de Oro also runs a “home program,” authorities said. Members who reached a certain level learned La Luz de Oro was listed on the grant deed of the houses they had purchased, Arreola said.

Mercedes Navarrete, who has denied the allegations, served 145 days in custody after being found guilty of similar crimes in Michigan in 1999, Arreola said.