Pyramid Scheme Leader Who Bilked Thousands Gets 20 Years

After hearing several working-class Latinos say they were bilked out of thousands of dollars, the leader of a Panorama City-based pyramid scheme that ensnared about 16,000 people was sentenced Wednesday to 20 years in prison.

In sentencing Mercedes Navarrete, head of La Luz de Oro Corp., Los Angeles Superior Court Judge Tricia Ann Bigelow said the 55-year-old woman “took advantage of particularly vulnerable people.” She said Navarrete “played on their religious beliefs” and has shown no remorse for actions that investigators say ruined people’s credit, drained their life savings and destroyed their hopes for dream homes and educations for their children.

Clay Jacke, Navarrete’s lawyer, called the sentence “cruel and unusual punishment” and said his client has given notice that she will appeal.

“People clearly lost money, and she is saddened by this,” Jacke said. “But she didn’t set out to do anything that would cause that.”

Navarrete, husband Felix and daughter Joan Frederick were convicted in October of grand theft, securities fraud and tax evasion. Frederick was sentenced late last year to 12 years. Felix Navarrete was sentenced to one year and placed on probation, according to the district attorney’s office.

The schemes of La Luz de Oro, which means the Light of Gold, took in about $9 million from individual investors, most of which was never returned, said Los Angeles Police Det. John D. Rodriguez.

Deputy Dist. Atty. Allan C. Fork said La Luz also cost Mitsubishi Finance Corp. of Orange County about $6.5 million in car sales and lease transactions from dealerships in Van Nuys, Duarte, La Puente Hills and Anaheim.

Barry Gilbert of the State Franchise Tax Board said La Luz de Oro still owes California $376,000 in taxes.

“The state was another victim,” he said after court.

Authorities and victims said there are hundreds of other victims who have not come forward.

“They don’t want to make a complaint because they are still hanging on, hoping they will get some money,” said Maria Herrera, 39, of Palmdale, who lost $3,000 borrowed from family, friends and co-workers.

A restitution hearing for victims is scheduled July 18 to divide about $2 million in assets seized by police.

The district attorney’s office says people who believe they were victimized by La Luz should call court-appointed receiver Robb Evans & Associates of Sun Valley at (818) 768-8869, where a telephone message in Spanish is available.