Investment Fraud

Alleging that 10 brokers made millions of dollars at the expense of retirees, federal regulators accused them Thursday of misrepresenting complex and illiquid mortgage investments as safe and suitable for conservative investors. The Securities and Exchange Commission, in a civil fraud lawsuit filed in West Palm Beach, Fla., federal court, said the brokers worked for Brookstreet Securities Corp. of Irvine, which went out of business in 2007.

A Sherman Oaks money manager accused of spending millions of his investors' dollars on a lavish lifestyle and high-profile charitable contributions agreed Tuesday to let a court-appointed receiver manage his companies' assets. Bruce F. Friedman has agreed to meet with the receiver that U.S. District Judge Manuel L. Real appointed to operate his companies, Diversified Lending Group Inc. and Applied Equities Inc., said a lawyer for the Securities and Exchange Commission, which is suing Friedman.

Six Orange County men face criminal fraud charges in an alleged $52-million investment scam that was said to promise big profits from luxury developments next to golf courses designed by Arnold Palmer, Jack Nicklaus and Greg Norman. The criminal cases, filed Thursday in Orange County Superior Court by the office of California Atty. Gen. Jerry Brown, follow civil charges brought by the Securities and Exchange Commission against the operators of Irvine-based Carolina Development Co.

R. Allen Stanford, the Texas billionaire charged Tuesday with perpetrating an $8-billion investment fraud, cast himself as offshore investment guru to the transatlantic jet set and benefactor to the Caribbean islands' poor through multimillion-dollar promotions of their beloved sport of cricket.

The Securities and Exchange Commission has opened an investigation into an Orange County real estate lending company that is owned by the husband of a California state assemblywoman. In an e-mail to his firm's roughly 3,000 investors, Point Center Financial Inc. President Dan J. Harkey disclosed that the SEC had subpoenaed records from the firm last week.

California Assemblywoman Diane Harkey accepted $16,600 in political contributions from real estate developers who had received loans from her husband's business, now under investigation by the Securities and Exchange Commission. The borrowers later failed to repay loans brokered by her husband's lending company, Point Center Financial Inc. of Aliso Viejo.

Small investors accused a prominent California real estate brokerage and a former Orange County businessman in a lawsuit Wednesday of taking part in an elaborate scam that fleeced individual investors out of millions of dollars in recent years. The lawsuit, filed in federal court in San Jose, alleges that brokers at Marcus & Millichap allegedly took part in a conspiracy to buy small commercial properties, artificially inflate their values and sell them to unsuspecting investors.

Even with Bernard L. Madoff heading to prison Thursday after confessing to an epic Ponzi scheme, the intrigue over his case deepened as embittered victims pressed the government to find out who may have helped him and where the money went. At a 75-minute court hearing, he pleaded guilty to 11 securities-related fraud counts and said he was "so deeply sorry and ashamed."

The top executive of an Orange County investment management company has relinquished control of the firm amid allegations that he defrauded clients. Irvine-based Private Equity Management Group Inc. said in a statement that Danny Pang had "voluntarily stepped aside" as chairman and chief executive while the firm conducts an internal probe of its operations, "including its investment management policies and procedures." The firm said its chief financial officer, Wilbur Quon, also stepped down.

It's a classic rags to riches to rags story. The son of farmers leaves his village behind, moves up from textile mills to real estate to IT outsourcing for multinational firms. He emerges as one of India's wealthiest and most famous entrepreneurs -- until he reveals that his empire was floating on an accounting lie and it all comes crashing down. The U.S. has its Wall Street meltdown and the Bernard Madoff investment scandal.