Former Financial Advisor Sentenced to 14 Years in Federal Prison for $12 Million Fraud that Caused Clients to Lose Retirement Savings

/
3 mins read

          LOS ANGELES – A former financial advisor with a lengthy disciplinary history was sentenced today to 168 months in federal prison for a real estate investment con that caused his clients – many of them elderly people who had invested their retirement savings – to lose more than $12 million.

          Paul Ricky Mata, 58, a former resident of Upland who now lives in Oceanside, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $12,560,385 in restitution to his victims. Mata was remanded into federal custody at the hearing’s conclusion.

          On July 19, Mata pleaded guilty to 17 felonies: 11 counts of mail fraud, three counts of wire fraud, one count of making a false statement in a bankruptcy proceeding, one count of concealing assets in bankruptcy, and one count of making a false oath and accounts in bankruptcy.

          From August 2008 to September 2015, Mata caused victims to invest in several of his businesses, including Secured Capital, Logos Real Estate, and other ventures. Mata failed to disclose his disciplinary history to his victims, including disciplinary actions taken against him by the states of Nevada and California, a one-year suspension and $10,000 fine imposed by the Financial Industry Regulatory Authority (FINRA), and a three-year suspension by the Certified Financial Planner (CFP) Board stemming from various forms of misconduct, including omitting material facts necessary to make other statements not misleading.

          Mata induced his victims to invest their money in Secured Capital, a real estate investment program that purportedly invested in “government-backed tax liens,” “asset-backed deed certificates,” and distressed commercial and residential properties. Mata guaranteed investors that Secured Capital’s investment return generated annual rates of 5 percent to 10 percent, when in fact, investments in Secured Capital had significant loss risks and did not make a profit from 2011 onward.

Related:  SENTENCINGS IN THE UNITED STATES ATTORNEY'S OFFICE

          Instead of properly investing his clients’ money, Mata used Secured Capital investor funds to pay his personal expenses, including a $197,000 down payment on his personal residence in Upland, loans to himself and to other entities he created, and $370,000 that was transferred into his personal bank accounts.

          “It was not simply that [Mata] was an investment advisor to his victims,” prosecutors argued in a sentencing memorandum. “It was that, for many of them, he met them through church. He prayed with them, professed to share values and beliefs with them, and he acted like they were his friends. Moreover, many of his victims are currently retired, and/or were in the process of retiring when [Mata] advised them to enter into his risky investments based on false pretenses.”

          Mata also made false statements on bankruptcy court documents in October 2016, including that he had not used any business names during the previous eight years, and that he had not filed for bankruptcy protection within the previous eight years. In fact, Mata had previously filed for bankruptcy in June 2010.

          During the bankruptcy proceeding, Mata fraudulently concealed his personal property – including a 2008 Mini Cooper automobile and a 2001 Jeep – from the government and from his creditors.

          At a bankruptcy hearing in November 2016, Mata lied when he denied that he had transferred anything to family or friends during 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 Upland home to his wife.

Related:  Daphne Methamphetamine Dealer Sentenced to 12 Years in Prison

          In 2015, the United States Securities and Exchange Commission filed a civil action against Mata and two business associates, alleging that they operated the real estate scam. Later that year, the SEC obtained a judgment against Mata that enjoined 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 $14 million restitution order and $6.3 million in civil penalties.

          The FBI investigated this matter.

          Assistant United States Attorney Sean D. Peterson of the Riverside Branch Office prosecuted this case.

Justice 101