Orange County Man Pleads Guilty to Running Investment Scams That Raised More Than $17 Million Via False Promises of House Flipping Profits
In a recent case of financial fraud, an Orange County man pleaded guilty to running investment scams that raised over $17 million by deceiving investors with false promises of house flipping profits. Brett Barber, a former co-owner of two companies in Newport Beach, admitted to participating in two fraudulent schemes that defrauded victim investors out of their money and property. Barber and his co-conspirators falsely represented that their firms bought and sold real estate projects and guaranteed investors an 8% to 10% return. However, these promises turned out to be bogus, and Barber used the investor funds for personal gain and to repay earlier investors. Several elderly, vulnerable victims were affected by this fraud. Barber faces a maximum sentence of 20 years in federal prison for each wire fraud count and life imprisonment for criminal contempt.
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Summary
In a recent case in Costa Mesa, an Orange County man named Brett Barber has pleaded guilty to running fraudulent investment schemes. These schemes raised over $17 million from investors, many of whom were elderly. Barber’s schemes involved false promises of guaranteed returns through house flipping profits. He also violated a court order and formed a company called National American Capital (NAC) to continue his fraudulent activities.
Background Information
Costa Mesa Man’s Guilty Plea
Brett Barber, a Costa Mesa man, recently pleaded guilty to federal criminal charges related to his fraudulent investment schemes. These schemes involved raising more than $17 million from investors through false promises of house flipping profits.
Fraudulent Investment Schemes
Barber’s fraudulent investment schemes operated under the companies BNZ Capital and National American Capital (NAC). Through these schemes, Barber and his co-conspirators falsely represented that they were engaged in real estate deals and promised investors guaranteed returns of up to 10%.
Targeting Elderly Investors
Barber’s schemes specifically targeted elderly investors, taking advantage of their vulnerability. At least five of the victims of his fraud were elderly individuals who suffered significant hardship as a result.
Disobeying a Court Order
Barber also disobeyed a court order to go to jail for violating the terms of his pretrial release. This further demonstrates his disregard for the law and the seriousness of his fraudulent activities.
Formation of National American Capital (NAC)
After learning of the investigation into BNZ Capital, Barber formed a new company called National American Capital (NAC) to continue his fraudulent activities. NAC operated in a similar manner to BNZ Capital, deceiving investors with false promises of real estate development projects.
Details of the Fraudulent Schemes
BNZ Capital Fraudulent Scheme
Under the BNZ Capital scheme, Barber and his accomplices falsely represented that they bought and sold real estate projects and made profits through house flipping. They promised investors guaranteed returns of between 8% and 10%, as well as potential bonuses based on successful deals.
Promise of Guaranteed Returns
Barber and his co-conspirators misled investors by promising them guaranteed returns on their investments. These promises gave investors a false sense of security and enticed them to invest large sums of money.
Misrepresentation of Funds’ Safety
Barber falsely represented that investor funds were “safe” and “FDIC insured.” This misrepresentation gave investors a false sense of confidence in the safety of their investments.
Use of Investor Funds
Instead of using investor funds for legitimate real estate projects, Barber primarily used the funds to pay himself, his co-conspirators, and to purchase residences for himself and his associates. Some of the investors’ money was used to repay earlier investors.
Creation of National American Capital (NAC)
After BNZ Capital came under investigation, Barber formed NAC as a way to continue his fraudulent activities. NAC operated in a similar manner to BNZ Capital, deceiving investors with false promises of real estate development projects.
Similarities to the BNZ Capital Fraud
The NAC scheme bore striking similarities to the BNZ Capital fraud. Both schemes involved lies told to investors about real estate projects and promised returns. The only way NAC could repay earlier investors was by soliciting money from new investors.
Lies Told to Investors
Barber and the marketers working at his direction told numerous lies to investors, including false claims about the length of time NAC had been in business, the number of parcels of land it owned, and the purchase and conversion of property in Newport Beach.
Losses Incurred
Barber’s fraudulent schemes caused significant losses for investors. The estimated losses resulting from the BNZ Capital scheme are at least $7 million, while the NAC scheme caused a loss of at least $3.5 million.
Violations and Consequences
Failure to Disclose Previous Regulatory Action
Barber failed to disclose to investors that he had previously been barred from acting as or associating with a broker-dealer by the Financial Industry Regulatory Authority (FINRA). This failure to disclose his previous regulatory action demonstrates his intention to deceive investors.
Violation of Pretrial Release Terms
After being released on bond, Barber violated the terms of his pretrial release by failing to surrender to the United States Marshals Service as ordered by the court. This demonstrated his disregard for the court’s authority and further implicated him in criminal behavior.
Arrest and Federal Custody
Barber was eventually arrested in Santa Cruz County, California, for his violation of the court’s order. He was transferred to federal custody in Los Angeles, where he is currently being held.
Sentencing Hearing and Potential Prison Sentences
Barber is scheduled for a sentencing hearing on March 4, 2024. He faces a statutory maximum sentence of 20 years in federal prison for each wire fraud count and a statutory maximum sentence of life imprisonment for the criminal contempt count.
Involvement of Other Individuals
Co-conspirator Louis Zimmerle
Barber’s co-conspirator, Louis Zimmerle, also pleaded guilty to wire fraud in January 2022. Zimmerle admitted to participating in the BNZ Capital scheme and keeping approximately $582,815 of victim investor money.
Zimmerle’s Guilty Plea and Sentencing
Zimmerle’s sentencing hearing is scheduled for January 22, 2024. He faces potential penalties for his role in the fraudulent schemes orchestrated by Barber.
SEC Civil Lawsuit Against Barber, Zimmerle, and BNZ Capital
In addition to the criminal charges, the United States Securities and Exchange Commission (SEC) has filed a civil lawsuit against Barber, Zimmerle, and BNZ Capital for fraudulently raising more than $13 million from over 100 retail investors. The FBI is investigating this matter, and the SEC has provided substantial assistance.
Prosecution and Legal Details
Prosecutor Assigned to the Case
The prosecutor assigned to Brett Barber’s case is Assistant United States Attorney Bradley E. Marrett of the Santa Ana Branch Office. Marrett will be responsible for presenting the evidence against Barber and seeking appropriate legal consequences for his fraudulent activities.
Contact Information for the Public Information Officer
For more information or inquiries regarding the case, the Public Information Officer can be contacted. Ciaran McEvoy, the Public Information Officer, can be reached at ciaran.mcevoy@usdoj.gov or (213) 894-4465.
Press Release Numbers
This press release is numbered 23-233, indicating that it is the 233rd press release from the U.S. Attorney’s Office, Central District of California, in 2023.
Related Press Releases
The article mentions several related press releases involving other cases of financial fraud in the Central District of California. These press releases provide additional context and examples of the efforts made by authorities to combat fraudulent activities in the region.
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Contact Information
To contact the Central District of California for more information or assistance, the following contact information can be used:
- Phone: 213-894-2400
- Address: 312 North Spring Street Suite 1200 Los Angeles, California 90012
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To stay connected with the latest updates, resources, and information from the Central District of California, the following options are available:
- Social Media Links: The article mentions that social media platforms are used to stay connected and share relevant updates.
- Archived Press Releases: The press releases mentioned in the article can be accessed for further information and details.
- Legal Policies and Disclaimers: The Central District of California provides legal policies and disclaimers that can be reviewed for more information regarding its services and responsibilities.
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