former financial advisor sentenced to 14 years in federal prison for $ 12 million fraud that caused clients to lose their retirement savings | USAO-CDCA
LOS ANGELES – A former financial adviser with a long disciplinary history was sentenced today to 168 months in federal prison for a real estate investment scam that lost more than $ 12 million to his clients – many of whom were seniors who had invested their retirement savings.
Paul Ricky Mata, 58, a former Upland resident who now lives in Oceanside, was convicted by U.S. District Judge R. Gary Klausner, who also ordered him to pay $ 12,560,385 in restitution to his victims. Mata was placed in federal custody at the end of the hearing.
On July 19, Mata pleaded guilty to 17 felonies: 11 counts of mail fraud, three counts of wire fraud, one count of misrepresentation in bankruptcy proceedings, one count of concealing assets in bankruptcy, and one count of false declaration of oath and bankruptcy accounts.
From August 2008 to September 2015, Mata urged victims to invest in several of his businesses, including Secured Capital, Logos Real Estate, and others. Mata failed to disclose his disciplinary history to his victims, including disciplinary action taken against him by the states of Nevada and California, a one-year suspension, and a $ 10,000 fine from the Financial Industry Regulatory Authority ( FINRA) and a three-year suspension. by the Chartered Financial Planner (CFP) Board resulting from various forms of misconduct, including the omission of material facts necessary so that other statements are not misleading.
Mata urged his victims to invest their money in Secured Capital, a real estate investment program that allegedly invested in “government guaranteed tax liens”, “asset-backed deed certificates” and commercial and residential properties. in trouble. Mata assured investors that the return on Secured Capital investments generated annual rates of 5-10%, when in fact investments in Secured Capital involved significant risk of loss and did not generate a profit from it. from 2011.
Instead of properly investing his clients’ money, Mata used investor funds Secured Capital to pay for his personal expenses, including a down payment of $ 197,000 on his personal residence in Upland, loans to himself. and other entities he created, and $ 370,000 which was transferred to his personal bank accounts.
âIt wasn’t just that [Mata] was an investment advisor for his victims, âprosecutors argued in a sentencing memorandum. âIt’s because for many of them he met them in church. He prayed with them, professed to share values ââand beliefs with them, and he acted as if they were his friends. In addition, many of its victims are currently retired and / or were about to retire when [Mata] advised them to embark on his risky investments on the basis of false pretenses.
Mata also made false statements on bankruptcy court documents in October 2016, including that he had not used any business names in the previous eight years and had not filed for bankruptcy. during the previous eight years. In fact, Mata had already filed for bankruptcy in June 2010.
During the bankruptcy proceedings, Mata fraudulently withheld his personal property – including a 2008 Mini Cooper automobile and a 2001 Jeep – from the government and its creditors.
At a bankruptcy hearing in November 2016, Mata lied when he denied transferring anything to family or friends in the previous four years. In fact, in October 2016 Mata transferred the 2008 Mini Cooper to his daughter, and in August 2016 he transferred his house from Upland to his wife.
In 2015, the United States Securities and Exchange Commission filed a civil action against Mata and two business associates, alleging they had exploited the real estate scam. Later that year, the SEC obtained a judgment against Mata which prohibited him from violating securities laws and ordered him to pay $ 11,748,831. That same year, the California Department of Business Oversight obtained a permanent injunction against Mata, as well as a restitution order of $ 14 million and $ 6.3 million in civil penalties.
The FBI has investigated this matter.
Assistant United States Attorney Sean D. Peterson of the Riverside branch continued the case.