San Francisco-area prosecutors uncovered a fraud that wound through decades and sent a 73-year-old real estate agent to prison for eight years
A real estate agent will spend the next eight years in prison for stealing more than $20 million from close friends over decades – a Ponzi scheme illustrating the danger of valuing relationships over diligence.
The Sonoma County District Attorney sought a lengthier sentence for Aldo Joseph Baccala of Petaluma, 73, but Judge Gary Medvigy cited sentencing guidelines for his age and first convictions prohibiting a longer prison term, reported the Petaluma Press-Democrat.
Prosecutors accused Baccala of offered returns that started at 12 percent for real estate investments that he never actually made. Instead, as his stock market losses mounted, he used money from new investors to pay earlier investors, offering as much as 27.5 percent in annual returns at the end before the Ponzi scheme collapsed in lawsuits and arrests.
“The scale and scope of this man’s fraud on unsuspecting investors is staggering,” said District Attorney Jill Ravitch in an earlier release. “That so many of his victims lost their livelihoods, their homes and their retirement savings, to this man’s scheming and greed is beyond tragic.”
The investments Baccala enticed his victims to fund included real estate purchases, the development or improvement of assisted living facilities, mushroom farm improvements, loans to mobile home buyers and investments in a hospital project. Baccala said his investors would be named on property deeds for these purchases.
None were. None of the investments actually occurred.
In a fraud that wound through more than 20 years of con-artistry, investors only began digging into the real estate documentation after Baccala sent a letter telling them that their guaranteed payments would cease.
More than 50 investors lost a total of between $15 million and $20 million between them. Most are elderly and had known Baccala for years.
In retrospect, a promise of 12 percent return on a real estate investment should itself raise a red flag, but “at the time, people were doing that,” said Steve Gallenson, an attorney who represented Baccala briefly during preliminary hearings before a public defender picked up the case. “People were acting against the advice of their accountants and their friends, but they wanted that 12 percent. There’s a place for due diligence.”
The Sonoma County District Attorney sought a lengthier sentence for Aldo Joseph Baccala of Petaluma, 73, but Judge Gary Medvigy cited sentencing guidelines for his age and first convictions prohibiting a longer prison term, reported the Petaluma Press-Democrat.
Prosecutors accused Baccala of offered returns that started at 12 percent for real estate investments that he never actually made. Instead, as his stock market losses mounted, he used money from new investors to pay earlier investors, offering as much as 27.5 percent in annual returns at the end before the Ponzi scheme collapsed in lawsuits and arrests.
“The scale and scope of this man’s fraud on unsuspecting investors is staggering,” said District Attorney Jill Ravitch in an earlier release. “That so many of his victims lost their livelihoods, their homes and their retirement savings, to this man’s scheming and greed is beyond tragic.”
The investments Baccala enticed his victims to fund included real estate purchases, the development or improvement of assisted living facilities, mushroom farm improvements, loans to mobile home buyers and investments in a hospital project. Baccala said his investors would be named on property deeds for these purchases.
None were. None of the investments actually occurred.
In a fraud that wound through more than 20 years of con-artistry, investors only began digging into the real estate documentation after Baccala sent a letter telling them that their guaranteed payments would cease.
More than 50 investors lost a total of between $15 million and $20 million between them. Most are elderly and had known Baccala for years.
In retrospect, a promise of 12 percent return on a real estate investment should itself raise a red flag, but “at the time, people were doing that,” said Steve Gallenson, an attorney who represented Baccala briefly during preliminary hearings before a public defender picked up the case. “People were acting against the advice of their accountants and their friends, but they wanted that 12 percent. There’s a place for due diligence.”
