While restitution has been ordered in a complicated
Fresno Ponzi scheme case, victims are unlikely to see much of their lost cash again. The Fresno
County Superior Court has ordered $46.5 million be paid to over 1,200
investors, who are mostly from Fresno's Armenian-American community.
A securities fraud attorney in the case has stated that the victims of
Ponzi scheme should receive something, "but it will be pennies on the dollar."
John W. Otto allegedly ran the scheme through three companies he created:
HL Leasing Inc., Heritage Pacific Leasing, and Air Fred LLC. Many arrests
were made in the case, and several employees of the companies have been
held liable. Otto committed suicide in 2009, further complicating the
case, but his wife and two employees took part in the three-week trial
for the California Ponzi scheme.
According to officials, the Ponzi scheme targeted members of both St.
Paul's Armenian Church and Holy Trinity Armenian Apostolic Church.
The investment fraud spread through the congregations by word of mouth
once the initial investors saw returns. Unfortunately, it is alleged that
the money taken in was being used to pay off previous investors instead
of going into the American Express lease agreements that were promised.
It is alleged that Otto's wife and employees knew about the Ponzi
scheme, but kept quiet in order to fund their lavish personal expenses.
David P. Meyer & Associates represents victims of
California Ponzi schemes in
stockbroker mediation, arbitration, and litigation. We are respected investment fraud attorneys
and have recovered millions of dollars for our clients.