Costa Mesa man pleads guilty to running phony investment scheme out of business based in Newport Beach

A Costa Mesa man pleaded guilty Monday to 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.

Brett Barber, 44, who was a co-owner of Newport Beach-based BNZ Capital One, entered his plea to two counts of wire fraud and one count of criminal contempt, according to the U.S. Attorney’s Office.

U.S. District Judge Otis D. Wright II scheduled a March 4 sentencing hearing, at which time Barber will face up to 20 years in federal prison for each wire fraud count, and up to life imprisonment for the criminal contempt count.

Another owner of BNZ Capital — Louis Zimmerle, 64, of Sacramento — pleaded guilty to one count of wire fraud and is expected to be sentenced on Jan. 22 in Los Angeles federal court.

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

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, according to court documents.

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 raised $6.9 million from investors but only invested $2.7 million and generated less than $5,000 in profits.

Barber and Zimmerle admitted using 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 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, federal prosecutors said.

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

Zimmerle admitted keeping about $582,815 of investor money, according to his plea agreement.

The criminal contempt charge against Barber stems from October 2021 when he was indicted and released on an $800,000 bond. In January, Wright revoked Barber’s bond and ordered him detained pending trial.

The court required Barber to self-surrender to the U.S. Marshals Service on or before Jan. 13, but he instead went on the lam, according to his plea agreement. He was arrested four months later and jailed in Santa Cruz before being brought back to Los Angeles, court papers show.