Advertisement
YOU ARE HERE: LAT HomeCollections

Broker to Serve Time for Bilking Investors

Crime: Judge sentences the Ventura man to 21 months in prison. Many clients lost life savings.

July 09, 2002|TIMOTHY HUGHES | TIMES STAFF WRITER

A Ventura mortgage broker who admitted bilking dozens of California investors out of nearly $6 million in an elaborate Ponzi scheme was sentenced Monday to 21 months in federal prison.

Larry Curtis Waltz, 57, was also ordered to repay the money to investors, many of whom were elderly and had entrusted their life savings or retirement nest eggs to him.

Waltz, who remains free on his own recognizance, will begin serving his prison sentence on Oct. 7. He also received three years' probation.

Several of Waltz's victims attended the sentencing hearing in Los Angeles before U.S. District Judge Margaret Morrow. They said they doubted they would recover their money because Waltz will essentially be forbidden from entering the investment business after his prison term.

"I'd like to see him locked up, but what good will that do us?" said Mark Erickson, an Anaheim resident who lost more than $300,000 in bad investment deals with Waltz. "I want him out so he can work and pay us back."

Waltz, who operated a Ventura-based lending agency, would solicit investors to provide loans to people buying a home or refinancing an existing property, authorities said. In exchange, investors would receive monthly interest payments throughout the term of the loan.

Investors were told they would get all their money back in one lump sum. They were provided with fabricated documents that appeared to be signed by legitimate borrowers, authorities said. Because Waltz managed the monthly interest payments, he was able to keep the operation going by paying investors with money collected from other victims.

But Waltz's scheme eventually collapsed. He acknowledged his guilt in letters sent in January 2001 to more than two dozen investors who lost money.

"You have wrongfully entrusted money to me to invest on your behalf," Waltz wrote. "I have wrongfully placed this money in risky investments, which you did not authorize. These investments failed. I have only a limited ability to pay you."

Waltz also wrote that he "no doubt violated a number of laws" but expressed hope that some investments "still have a chance of producing funds, which would enable me to pay you and other investors."

During Monday's hearing, Waltz dabbed tears from his eyes as the judge read the terms of his sentence, which came five months after Waltz pleaded guilty to three counts of mail fraud.

Waltz's attorney, Gary Lincenberg, and Assistant U.S. Atty. Angela Davis asked Morrow to sentence the defendant to 18 months in prison because he surrendered voluntarily.

"He lost a lot of his money and his clients' money," Lincenberg told Morrow. "This was eating at my client ... and he didn't want to continue down that road, so he went to investors and told them there were bad investments."

But the judge questioned whether Waltz turned himself in out of conscience or because he felt several investors were about to go to the authorities. She then added three months to his sentence based on several letters she received from investors detailing the depth of their financial loss.

Earlier in the proceeding, Waltz had asked the judge to consider a letter of apology he sent her as well as notes of support from several friends and business partners.

"I feel pretty bad about what I did," Waltz told Morrow. "I wrote you a letter and I would like to let that stand."

Some of Waltz's victims said the former mortgage broker used charm, guile and even religion to gain their trust and get them to invest.

"It did well for 20 years, and then one day the check bounced," said Wendy Elwyn, an Encinitas resident who attended the hearing on behalf of her 81-year-old mother, who invested more than $200,000 with Waltz.

For nearly two decades, Elwyn said her mother was able to live on the $2,300 monthly interest payments she received from Waltz--until December 1999, when the checks stopped. She said her mother has since moved in with her and gets by on a monthly $770 Social Security check.

"My mother can't believe it," Elwyn said. "He sat in our living room and prayed with us."

Advertisement
Los Angeles Times Articles
|
|
|