Downey man who ran a Ponzi scheme for 15 years faces sentencing

Prosecutors are expected to ask a judge today to send a man to prison for 15 years for running a Ponzi scheme that took in about $30 million as well as a scam that preyed on homeowners facing foreclosure.

Juan Rangel of Downey, who is already behind bars awaiting sentencing for a 2009 conviction for bribing a Bank of America branch manager, pleaded guilty last October before U.S. District Judge S. James Otero to one count each of mail fraud and money laundering.

Rangel, 47, was indicted last year in Los Angeles federal court on charges that he and his Commerce-based company, Financial Plus Investments, recruited investors through Spanish-language newspapers, magazines, radio spots and infomercials.

Prosecutors said investors were promised guaranteed returns of 60 percent each year out of the profits from Rangel’s real estate investments and his lending business.

Instead, Rangel used the victims’ cash to make monthly mortgage payments on his $3 million home, to lease a Lamborghini and a limousine, and to buy cocaine, prosecutors said.

Rangel participated in “a scheme to defraud investors” and used the U.S. mail to do so, Otero said at a 2010 hearing.

In the related mortgage fraud scheme, Rangel and others targeted Spanish-speaking homeowners who were at risk of losing their homes and offered to help them avoid foreclosure, Assistant U.S. Attorney James A. Bowman said.

Rather than assist them, however, Rangel took titles to their homes and drained the remaining equity out of the properties, the prosecutor said.

FINRA arbitration is a dispute resolution process used to resolve financial disagreements between investors and brokerage firms or individual brokers. Administered by the Financial Industry Regulatory Authority (FINRA), it provides a less formal and often quicker alternative to litigation in court. Arbitration involves a neutral third party or panel of arbitrators who listen to both sides of the dispute and make a binding decision. This process is typically used for issues such as allegations of misconduct, unsuitable investment recommendations, or breach of fiduciary duty. The arbitration process begins with filing a claim, followed by selection of arbitrators, discovery, hearings, and finally, an award decision. While generally faster and less costly than court proceedings, FINRA arbitration’s binding nature means that the decision cannot be easily appealed. As such, it is crucial for parties to understand their rights and obligations before entering arbitration.