California Man Gets Five Years In Federal Prison For Scamming $32 Million From Clients In Ponzi Scheme

Salvatore Favata (aka Sam Favata) was sentenced Monday in a Santa Ana, California Federal Court to five years in prison for stealing $32 million from more than 200 investors through a real estate related Ponzi scheme, according to a story in the Los Angeles Times. He was also ordered to compensate his victims at a rate of $10,000 a month when he is released from prison. A one-time owner of Orange-based National Consumer Mortgage,

• "Favata had persuaded clients to refinance their homes and use the cash, and other assets, to invest in another arm of the company, promising investment returns of 30% to 60% a year. An investigation, triggered by tips to the Securities and Exchange Commission, revealed that little of the money was invested. Instead, Favata was paying earlier investors with funds from new investors in what is known as a Ponzi scheme."

Present at the sentencing in support of Favata were former Los Angeles Dodger stars Steve Garvey and Maury Wills. For more, see Ex-athlete gets 5-year sentence in Ponzi scheme (A Cal State Fullerton baseball star convicted in a real estate scam also is ordered to compensate victims).