According to federal investigators, a Southern California man used prayer
meetings to convince 2,300 Los Angeles residents to invest $62 million.
Milton Retana, of Huntington Park, was sentenced to 25 years in federal
prison after he was convicted of six counts of mail fraud and one count
of lying to agents investigating him.
Mr. Retana was accused of swindling working-class people out of millions.
He told his investors that their money would be used to buy and sell real
estate, when allegedly Mr. Retana was participating in a
Ponzi scheme. This type of scam is named after the notorious Charles Ponzi who used
money from new investors to pay off earlier investors. Generally, investors
are persuaded to invest with promises of high rates of return, when in
actuality, there are no actual profits earned.
Assistant U.S. Attorney James Bowman referred to the case as “a
predator investment fraud scheme.”
Mr. Retana targeted working-class families and the
Associated Press reported that he advertised in a Spanish-language magazine, on the Internet
and in seminars to attract investors. According to claims made against
Mr. Retana, many of these people had to mortgage their homes in order
to obtain the money to invest, while some used their lifesavings.