Ex-CEO of investment firm sentenced to 14 years in prison for Ponzi scheme
A federal judge sentenced the head of a defunct Southern California real estate investment firm to 14 years in prison for running a Ponzi scheme that lost as much as $169 million for hundreds of investors, the U.S. attorney’s office said.
U.S. District Judge Cormac J. Carney on Monday also ordered Michael J. Stewart, a 68-year-old San Clemente resident, to pay 120 victims $9.2 million in restitution.
Stewart and his partner John Packard founded Pacific Property Assets in 1999 and bought, renovated and sold apartments in Southern California and Arizona.
Prosecutors alleged Stewart misrepresented the company’s financial condition to new investors and used their money to pay off previous investors, lenders and Stewart and Packard’s salaries.
The company filed for bankruptcy protection in June 2009.
A jury convicted Stewart last year of 11 counts of mail fraud. Packard has pleaded guilty to one count of mail fraud and is scheduled to be sentenced in late March.
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