2 Cross Financial Owners Guilty of Investor Fraud
Two owners of Cross Financial Services Inc., a defunct Irvine investment firm, were found guilty Friday of defrauding 700 investors out of $22 million by promising large returns on short-term business loans.
A federal jury in Los Angeles convicted Douglas S. Cross, 49, formerly of Laguna Niguel, and Owen R. Fox, 56, of Marina del Rey of conspiracy, securities fraud and international money laundering.
The two had promised 15% to 20% returns on loans to companies doing business with the government and pledging payments from the government to secure the loans, according to charges against them.
Instead, they used some of the money on their lavish lifestyle, such as the $710,000 Fox used to buy a Cessna airplane and a 44-foot yacht for himself, according to FBI testimony. And, working with other conspirators, they transferred some investor funds to secret bank accounts in Switzerland.
U.S. District Judge Consuelo Marshall scheduled sentencing for Aug. 6. Cross faces more than 12 years in prison under federal sentencing guidelines, and Fox, who also was convicted of obstructing justice, faces up to 14 years in prison, Assistant U.S. Atty. Pamela Johnson said.
Two other leaders of Cross Financial were indicted on similar charges. Carroll Siemens, 68, of Peoria, Ariz., pleaded guilty to conspiracy, fraud and money laundering and is scheduled for sentencing July 23. Michael Colello, 48, of New Rochelle, N.Y., is scheduled to begin trial Sept. 4 before Marshall.
