A San Diego businesswoman pleaded guilty Wednesday to conspiracy, securities fraud and obstruction of justice charges stemming from a $400 million Ponzi scheme, in which she took investor funds intended as loans for liquor licenses and funneled the money into her companies and for personal purchases.
Gina Champion-Cain, 55, founder and former CEO of American National Investments, was charged by the Securities and Exchange Commission last summer for taking millions from investors and telling them the money would be used to support loans for people seeking California liquor licenses. Instead, she used the money for personal expenses, to fund her other businesses or to pay back other investors, prosecutors said.
Champion-Cain faces a maximum possible term of 15 years in prison. Sentencing is slated for Oct. 13.
Former American National Investments Chief Financial Officer Crispin Torres, 53, also pleaded guilty Wednesday to helping Champion-Cain transfer investor funds from escrow accounts to keep her businesses afloat. Prosecutors said he also fabricated receipts and opened a bank account under a name similar to a well-known escrow company for investors to deposit their funds into, which "further supported the investors' belief that the lending program was legitimate."
Over $400 million from more than 100 investors went into the scheme between 2012 and 2019, according to the plea agreement. Prosecutors said at least one financial institution lost more than $1 million, and that the loss to all investors ranges from $65 million to $150 million.
According to the plea agreement, Champion-Cain used at least $60 million in investor funds to meet expenses at her businesses. In addition, funds were used to pay for residences in Mission Beach and Rancho Mirage, at least $2 million to pay her own salary at American National Investments, and hundreds of thousands of dollars were spent on box seats at sporting events, automobiles, credit card bills, jewelry and more.
The plea agreement states that the lending program investors were putting funds into "was completely fictitious" and that many of the supposed liquor license applicants had not sought loans through Champion-Cain. Instead, she created fake lists with applicant names pulled from the Department of Alcohol Beverage Control website, according to the plea agreement.
"This is by far the largest Ponzi scheme discovered in this district," U.S. Attorney Robert Brewer said. "Gina Champion-Cain constructed and maintained a house of cards that has come crashing down around her and all her victims. The scheme deprived many investors of their retirement savings, and cost at least one investor tens of millions of dollars and forced him into bankruptcy. And now it will cost the defendant her freedom. We will continue our aggressive efforts to root out corporate fraud and hold greedy criminals accountable."
