Brown Announces 24 Year Sentence In $7 Million San Diego Mortgage Scam
Theodore Swain, 60 was sentenced to 24 years in state prison for stealing $7 million dollars in a Ponzi scheme bilking 100 investors in Southern California. In addition to his prison sentence, Mr. Swain was ordered to pay $6.7 million dollars in restitution to his victims.
Mr. Swain has had a “history of ripping people off with his worthless investment schemes,” says California Attorney General Edmund Brown. “Most recently, he convinced 99 consumers, including a doctor, lawyer and aerospace engineer, to invest tens of thousands of dollars in property which does not exist.”
Between 2003 and 2006, Mr. Swain convinced consumers to invest $1,000 to $1000,000 in mortgage certificates which never existed. Swain was able to manufacture documents, which promised 10% annual returns on real estate projects. “This was a very convincing Ponzi scheme,” said Deputy Attorney General Tawnya Boulan who prosecuted the case jointly with the California Department of Corporations. “Swain was very persuasive and ripped off sophisticated investors by maintaining an appearance of success.”
As is typically done in Ponzi schemes, Swain used new investor capital to pay older investors, allowing him to continue with the fraud for several years. Swain also failed to disclose pertinent investor information allowing his investors to make informed decision in violation California law.
A San Diego jury found Mr. Swain guilty of 15 counts of fraud, 6 counts of grand theft, 3 counts of securities fraud and 3 counts of elder financial abuse. In addition to the substantive charges, Mr. Swain was convicted of sentencing enhancements related to securities fraud called white collar crime enhancements.
