Detectives bust Ponzi scheme
Redondo Beach Police Department detectives have arrested a local woman on suspicion of operating a Ponzi scheme targeting Latin immigrants that victimized at least 55 people for more than $500,000.
Mariana Montes, 41, of Redondo Beach, was arrested on Dec. 29. Police were attempting to locate her for an outstanding arrest warrant on another crime – elder financial abuse – when they uncovered records that allegedly revealed a far-ranging Ponzi scheme with victims from Sacramento to Arizona.
“She was busy,” said Lt. Joe Hoffman, head of the RBPD detective bureau.
According to Hoffman, detectives originally became interested in Montes when they discovered an elderly woman with whom she had served as a caregiver who’d lost her house after Montes repeatedly refinanced her home loans.
“She had basically lived with and helped care for this elderly woman for many years, and then back about five or six years ago began a series of refinances and ended up keeping all the money, which was almost $600,000,” Hoffman said. “It caused the woman to lose her home because of the amount of debt she owed on the home.”
After the woman lost her home and went into assisted living, police believe Montes launched another scheme. In June of 2007, she created a fictitious business called “Fast Results Investments” which promised investors the opportunity to earn returns of 25 percent or more. Montes established an office in Torrance and met personally with each potential investor, some who police say invested their entire life savings or retirement accounts. Typically, Hoffman said, investors would initially receive returns.
“For example, she wanted a minimum $5,000 investment and would tell people they’d get a 25 percent return, and people might get one check three months later for $1,250,” Hoffman said. “As time goes by the checks get smaller and then you don’t get any returns and your calls are going unanswered. That’s how a Ponzi scheme works – she would use all that money to pay the other investors, then tell those investors to tell friends…It’s all by word of mouth referral, and it all keeps building.”
“She was very convincing,” he added. “She went to great lengths. She had a fake business but an actual office, a very nice car – a BMW – and designer clothes and really put a good face on it like it was a legitimate investment company.”
Hoffman said detectives found “mountains” of records that indicate that probably far more than 55 people were taken by the scheme. Police are launching an outreach effort, particularly in the Spanish language media, in an attempt to locate more victims.
“There were Ponzi schemes nationally that were worth billions of dollars, and this is the same thing on a smaller scale,” Hoffman said. “But the impact is just as significant, in my opinion, because you are talking about people losing everything that they have…This is one of those cases where if it seems too good to be true, it probably is. That is one thing that probably holds true with all Ponzi schemes.”
The RBPD has established a special phone line, with English and Spanish options, for potential victims of this scheme to call at 310-379-2477 ext. 2332. ER