[UPDATED with Conviction:] William Warren Baker Pleads Guilty to Ponzi Scam, But Where's His Mom?
|No, PONZI scheme ...|
Laguna Niguel house flipper William Warren Baker, 59, pleaded guilty today to stealing more than $900,000 from investors in a Ponzi scheme by fraudulently promising to buy, refurbish, and re-sell distressed homes for a profit. The scheme was unearthed by detectives looking for Baker's elderly mother, who remains missing.
Baker copped to 13 felony counts of using untrue statements in the purchase or sale of securities and one felony count of grand theft from the United States Social Security Administration with sentencing enhancements and allegations for loss over $100,000, aggravated white collar crime over $500,000, and property damage over $150,000.
He could get up to 10 years in state prison at his July 15 sentencing in Santa Ana.
The home flipper met at least 10 investors through church, friends and other personal relationships. Baker's mother, 82-year-old Sara Jo Mowery, went missing in January 2009. Baker was arrested for fraud three months later.
According to prosecutors, the fraud probe revealed that after Mowery went missing, Baker siphoned funds from a joint account to which his mother's Social Security benefits were deposited.
The investigation into her disappearance continues.
ORIGINAL POST, MARCH 5, 2010, 7:40 A.M.: A Laguna Niguel man was arrested Thursday for allegedly bilking 10 people he met through church, friends and other personal relationships out of more than $900,000.
William Warren Baker fraudulently promised investors he would buy, refurbish, and re-sell distressed homes for a profit, but what the 57-year-old really did was engange in a Ponzi scheme, according to the Orange County District Attorney's Office.
In Ponzi schemes, investors are offered high, short-term returns on investments, but instead of the investments generating actual income and legitimate profits, the money from the investors is kept for the benefit of the defendant or used to repay earlier investors.
Baker has been charged with 13 felony counts of using untrue statements in the purchase or sale of securities and 13 felony counts of selling securities in issuer transactions without qualifications with sentencing enhancements and allegations for loss over $100,000, aggravated white collar crime over $500,000, property damage over $150,000, and property damage over $200,000.
Baker is also accused of exchanging investor funds for promissory notes or stocks without qualifying the investments with the California Department of Corporations, as required by law.
The alleged embezzlement occurred between Jan. 20, 2006, and May 7, 2008, according to prosecutors. Baker allegedly failed to purchase any property to be renovated and flipped as promised to his investors.
He is accused of instead purchasing a property for himself and transferring the property into trusts belonging to either his son or wife.
The complaint alleges Baker used investor money for personal expenses or to pay back old investors from previous ventures.
If convicted of all charges, Baker could get up to 32 years and eight months in state prison.
Currently held on $1 million bail--he must prove that the money is from a legal and legitimate source before posting bond--Baker is scheduled to be arraigned Monday in Santa Ana.