California Attorney General Rob Bonta announced the arrest and arraignment of two individuals accused of orchestrating a fraud scheme that allegedly defrauded victims of over $1 million. The defendants, who were recently arraigned in San Diego Superior Court, face felony charges including franchise fraud, security fraud, fraudulent securities scheme, grand theft, and a special allegation of aggravated white-collar crimes.
Attorney General Bonta stated: “The white-collar crime scheme perpetrated by these defendants stole money from Californians who were attempting to become entrepreneurs or make investments into business. At the California Department of Justice, we won’t stand idly by if individuals cause financial harm to hardworking Californians to enrich themselves.” He added that his office is committed to holding bad actors accountable and protecting Californians’ finances.
The alleged fraud took place between 2020 and 2023 when the defendants solicited funds from investors under the pretense of purchasing stock options or franchises for a pizza restaurant chain. Many victims had little business investment experience and believed they were becoming legitimate business owners or stockholders. Among those affected were individuals over 65 years old and two military veterans. Victims invested amounts ranging from $5,000 to $150,000. After collecting nearly $1 million from their victims, the defendants reportedly ceased communication with them.
Additionally, one defendant secured loans totaling $287,000 intended for small businesses post-pandemic but did not repay them.
The arrests followed an investigation by the California Department of Justice’s Special Prosecution Section Investigators and Bureau of Investigations White Collar Investigations Team. The defendants were extradited from Florida with help from the Osceola County Sheriff’s Office and United States Marshals Service.
It should be noted that a criminal complaint contains charges that must be proven in court; every defendant is presumed innocent until proven guilty.
