Moreno Valley man, accused of $24 million Ponzi scheme, pleads guilty – Press Enterprise

Hunter Lee

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A Moreno Valley man has pleaded guilty to a federal charge after authorities say he ran a two-decade-long Ponzi scheme that defrauded more $24 million from at least 200 investors.

Paul Horton Smith Sr., 59, pleaded guilty on Monday, Jan. 8, to one count of wire fraud, the U.S Attorney’s Office said.

From July 2000 to May 2020, Smith operated Riverside companies named Northstar Communications, Planning Services, and eGate, soliciting individuals to invest in something Smith called “Northstar,” according to the plea agreement. Many of Smith’s victim investors were retired.

He falsely told them that Northstar was an investment like an annuity and that Northstar invested in real estate or followed the stock market, the U.S Attorney’s Office said. He typically told the investors that their investments would generate a fixed rate of return and was a “safe investment,” prosecutors said.

Smith, however, never invested the money and instead deposited the funds into a non-interest-bearing checking account, federal prosecutors said. He then used some funds from later Northstar investors to pay earlier Northstar investors’ monthly interest payments, and to repay earlier investors who wanted to withdraw their money.

So the total loss to investors through the fraud, federal officials said, was $13,331,505.

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2024-01-09 22:00:09 , Moreno Valley News: The Press-Enterprise

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