Federal Judge Orders Return Of $29M+ In Real Estate Investment Scam Thet Left Investors In Financial Ruin

In Southern California, The Press Enterprise reports:

• Three Murrieta businessmen must return more than $29 million they obtained in an investment scheme that allowed them to live high but drove their investors to financial ruin, a federal judge ruled Monday. Central District Court Judge Virginia A. Phillips issued a 43-page ruling that accepted the findings of the Securities and Exchange Commission, which filed a lawsuit in February 2008.(1)

• The ruling in the civil case found that, between 2004 and 2007 the defendants, James B. Duncan, Hendrix Montecastro and Maurice McLeod engaged in illegal practices ranging from selling unregistered securities to misrepresenting how the money they raised would be used.

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• Many of the investors who were promised they would become millionaires in three years, instead lost their houses in foreclosure, the SEC said. Montecastro said, during a deposition, "I sold them a dream. ... They bought into the dream," according to the complaint.

For more, see Riverside judge orders businessmen to repay $29 million to scam victims.

(1) In addition to the SEC civil lawsuit, the defendants have been sued by a group of the investors and are under criminal investigation by the Riverside District Attorney and possibly by state and federal law enforcement agencies.