LOS ANGELES – A Costa Mesa man pleaded guilty today to federal criminal charges that he operated a fraudulent investment scheme that raised more than $17 million by promising investors, many of them senior citizens, that they could earn up to 10 percent returns on real estate deals, and to failing to comply with a court order that required him to remain in jail in violation of pretrial bail conditions.
Brett Barber, 44, a former co-owner of Newport Beach-based BNZ Capital One LLC and National American Capital, pleaded guilty to two counts of wire fraud and one count of criminal contempt.
According to the plea agreement, between May 2019 and October 2021, Barber engaged in two schemes to defraud investors of money and property.
In the first scheme, BNZ Capital, its executives, and several marketers raised funds by falsely claiming that the company was buying and selling real estate projects and “flip” properties. Barber, a co-conspirator, Louis Zimel, 64, of Sacramento, and the marketers falsely promised investors “guaranteed” returns of 8% to 10%, as well as bonuses if the deals were successful. According to court documents, Barber told investors that their money was “safe” and “FDIC insured.”
“Indeed, BNZ Capital purchased real estate but took no substantial steps to develop the lots, nor did it resell the properties for a profit. Rather, BNZ used investor funds primarily to make payments to Barber, Zimare, and others involved in the scheme, and to purchase the homes in which Barber and Zimare lived. A portion of the investor funds was used to repay earlier investors.”
During the scheme, Barber, Zimmerl and the marketers solicited or caused BNZ Capital to transfer approximately $13.8 million from victim investors, and investigators estimate that actual losses from the scheme were at least $7 million.
In his plea agreement, Barber admitted to receiving and retaining approximately $2,933,970 for his personal benefit from investors. At least five BNZ Capital investors were elderly and vulnerable victims who suffered significant hardship as a result of the fraud.
After Barber learned that federal authorities were investigating BNZ Capital, he launched a second fraud scheme, this time involving a company he founded in January 2021 called National American Capital (NAC). The NAC scheme operated virtually identically to the BNZ Capital fraud: Barber and marketers working at his direction lied to investors that their money would be used to fund a real estate development project. In reality, there was no such project, and the only way NAC could repay its previous investors was to raise money from new investors.
Specifically, in October 2021, Mr. Barber met with someone he thought was a potential investor, but who was actually an undercover agent. During this meeting, Mr. Barber told several lies, including that NAC had been in business for 20 years, that it owned 10 parcels of land in Laguna Beach, and that it had purchased property in Newport Beach and renovated it into a four-family home. None of these statements were true.
In his plea agreement, Barber admitted that the scheme resulted in losses of at least $3.5 million and that he also received and retained at least $388,669 of investor funds for his personal benefit.
During the BNZ Capital and NAC schemes, Mr. Barber failed to disclose to investors that he had previously been barred by the Financial Industry Regulatory Authority (FINRA) from acting as a broker-dealer or associating with any broker-dealer.
Eventually, after a federal grand jury indicted Barber in October 2021, he was released on bail. In January 2023, the court determined that Barber had violated the terms of his pretrial release and ordered him to surrender to the U.S. Marshals Service by January 13. Barber willfully disobeyed the court's order and failed to appear. In March 2023, Barber was arrested in Santa Cruz County, California. He was eventually transferred to the Federal Detention Center in Los Angeles, where he remains to this day.
U.S. District Judge Otis D. Wright II has scheduled a sentencing hearing for March 4, 2024, at which point Barbour faces a statutory maximum sentence of 20 years in federal prison on each count of wire fraud and a statutory maximum sentence of life in prison on each count of criminal contempt.
Zimmerl pleaded guilty to one count of wire fraud in January 2022. In a plea agreement, Zimmerl admitted to participating in the BNZ Capital fraud and receiving and retaining approximately $582,815 in victim investor funds. His sentencing hearing is scheduled for January 22, 2024.
In October 2021, the U.S. Securities and Exchange Commission (SEC) filed a civil lawsuit against Barber, Zimmerl, and BNZ Capital for fraudulently raising more than $13 million from more than 100 individual investors.
The FBI is investigating the matter, and the SEC has provided significant cooperation.
Assistant U.S. Attorney Bradley E. Mallett of the Santa Ana Division is prosecuting the case.
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