Costa Mesa man pleads not guilty to charges of federal fraud and money laundering

A Costa Mesa man was arrested by the FBI on Thursday on suspicion of participating in what investigators describe as a fraudulent investment scheme that raised $13.8 million by promising investors returns of up to 10% through real estate.

The U.S. Department of Justice announced the arrest of Brett Barber, 42, on Friday. Barber was a co-owner of BNZ Capital One, LLC, in Newport Beach and is charged with four counts of wire fraud and two counts of money laundering. Officials said the wire fraud charges could mean a maximum sentence of 20 years in federal prison while the money laundering charges could result in a maximum of 10 years if Barber is convicted in court.

Barber pleaded not guilty to all charges Thursday.

Another owner of the company, Louis Zimmerle, 62 of Sacramento, was also arrested and charged Thursday with one count of wire fraud, which he pleaded guilty to.

The Securities and Exchange Commission also launched a civil case naming Barber, Zimmerle and their company as defendants.

According to court documents, Barber and Zimmerle told investors that their company was in the business of real estate and other investments. They promised returns of 8% to 10% annually.

Investigators said that while the company did make some investments, those investments could not have generated enough profit to return principal investments or make good on the returns promised by Barber and Zimmerle. Between June 2019 and February 2020, they are alleged to have raised $6.9 million from investors but only invested $2.7 million and generated less than $5,000 in profits.

The complaint states that Barber and Zimmerle used investor funds to pay returns in addition to paying themselves and those involved with the scheme. They are said to have raised an additional $6.6 million since March 2020, according to court documents.

The company is said to have invested only $6.4 million of the total $13.5 million raised in real estate and alternative investment funds but barely generated $300,000 in profits and made at least $1.7 million in “Ponzi-like” payments to investors.

Investigators believe the actual losses are more than $9 million.

In Zimmerle’s plea agreement, he agreed that he received and kept about $582,815 of investor money, according to the U.S. Department of Justice.

Barber is expected to go to trial on Dec. 21.

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