Three Diamond Bar PTA moms at allegedly duped around 40 investors in a Ponzi scheme that lost victims up to $4 million.
Los Angeles County Sheriff's investigators believe that a total of $14 million was drawn in as part of the phony investment scheme and that $4 million was squandered by the PTA mothers.
UPDATE - July 8, 3:16 p.m.: Sheriff's investigators said .
UPDATE - July 6, 6:13 p.m.:
Two of the women were arrested at their Diamond Bar homes Tuesday after a six month fraud investigation that was linked to a third woman who was already convicted on separate fraud charges, according to Capt. Mike Parker of the Los Angeles County Sheriff's Headquarters Bureau.
All three women — 41-year-old Maricela Barajas (aka Maricela Torres), 50-year-old Juliana Menefee, and 51-year-old Eva Perez (convicted on previous charges) — had used social functions and school events to build trusting investors, who were told that the trio had an exclusive contract to distribute AltaDena Dairy products at Disneyland, Disney Hotels, and to small retailers.
The group promised investors a rate of return of up to 100 percent, enticing many of the victims to take out second mortgages on their homes, max out credit cards, and hand over their life savings to contribute a total of $14 million to the scheme.
With pressure from investors for payments, the group returned $10 million but was unable to come up with the additional $4 million.
Detectives from the Sheriff's Commercial Crime Bureau found that over $1.5 million were actual losses to the victims and another $2.5 million has not been located.
"It is speculated that the suspects used the money for lavish vacations, expensive hotels, new cars, and casinos in California and Nevada," Parker said in a news release.
Pressure continued to build and led to an internal audit of the business — meanwhile, one victim contacted deputies at the Walnut/Diamond Bar Sheriff's station to report the fraudulent transactions taking place at Perez's residences in Chino and on Wagon Trail Drive in Diamond Bar between 2008 and 2010.
Investigators found that the trio dealt only in cash and also collected money from investors at Barajas's Hopi Street home and Menefee's home on Beaverhead Drive in Diamond Bar.
The over 40 known victims resided in cities throughout the Western U.S., from Redondo Beach to Salt Lake City, Utah. and had indivdually invested between $5,000 and $208,000.
Sheriff's investigators said that most of the victims interviewed were embarrassed that they fell for the scheme that gave them hope "to make a better life for themselves and their families."
Perez, who pleaded guilty in a San Bernardino court to multiple felony counts of grand theft in 2010 for the same type of scheme, was already sentenced with 11 years in prison and an order to pay restitution to the victims.
Perez will face separate charges for involvement in this most recent Ponzi scheme and all three could face up to 20 years in state prison if convicted for the 22 felony charges, seven counts of grand theft, and 15 counts of securities fraud they face for this crime.
Barajas and Menefee are being held in the L.A. County Jail and are scheduled to be arraigned on Thursday, July 7.
More in this story: