Once a respected investment adviser in Monterey, former radio host Barbra Alexander faces federal prison time after a jury convicted her of 28 felony counts involving a $4 million Ponzi scheme that collapsed in 2010.
After a two-week trial and more than four days of deliberations in San Jose district court, the verdict clears the way for a civil trial by the U.S. Securities and Exchange Commission, which is seeking restitution for Alexander's victims who believed they were investing in secured real estate.
Lillian Arauz Haase, spokeswoman for the U.S. Attorney's Office, said further details of the jury's verdict were not available late Monday. Alexander's defense attorney, Peter Leeming of Santa Cruz, did not respond to requests for comment.
Alexander, 66, is the former producer of the internationally syndicated "Money Dots" financial talk show, aired locally on KION-AM 1460. She and partner Michael Swanson, 65, also operated the Monterey-based APS Funding, which told about 45 investors their savings would be used to offer "hard-money" short-term, high-interest loans for real estate development. They were assured 12 percent interest.
In reality, Alexander, Swanson and associate Beth Pina siphoned most of the funds for their own uses, including investments into Money Dots. Among her other diversions, Alexander spent $200,000 on a kitchen remodel for her Monterey rental home, then celebrated its completion by inviting her unsuspecting clients for a party.
As the investments fell in arrears, the trio continued to seek new investors to keep the scam afloat. Among the victims were retirees who invested their life savings. U.S. District Court Judge Lucy Koh allowed the Securities and Exchange Commission to depose two victims who were in their 70s and another who was suffering from brain cancer for fear they would not be alive for the commission's civil trial.
The scheme crumbled in 2009 when local investors complained to the Monterey County District Attorney's office that they were unable to get their money out of the fund. Deputy District Attorney John Hubanks and his office initially investigated with the Monterey and Carmel police departments, but soon realized the extent of the fraud and called in the FBI.
The three were arrested in October 2010 and indicted on 43 charges of mail and securities fraud, money laundering and conspiracy. Most of the charges carry maximum sentences of 20 years each in federal prison and up to $5 million in fines. Swanson was tried and convicted in a separate trial in September. Pina pleaded guilty to conspiracy to commit mail and wire fraud in December 2012.
About a dozen charges were dismissed before Alexander's and Swanson's trials. Sentencing for Swanson and Pina has been delayed pending Alexander's trial. It is now set for May 14.
Virginia Hennessey can be reached at (831) 753-6751 or firstname.lastname@example.org .