Spanish Language Ponzi Scheme

Men Who Allegedly Recruited Investors Through Advertisements in Spanish Language Publications Indicted in Connection with Ponzi Scheme


May 24, 2010 - A federal grand jury returned an indictment charging two brothers in connection with operating a Ponzi scheme where victims were recruited through advertisements that indicated investments were connected to the Economic Stimulus Plan, announced Steven M. Martinez, the Assistant Director in Charge of the FBI in Los Angeles, and André Birotte Jr, United States Attorney for Los Angeles.

Ruben Juan-Gonzalez, 34, of West Covina, California, and his brother, Rosendo Juan-Zaragoza, 27, of Los Angeles, California, were indicted by the grand jury in Los Angeles Thursday afternoon. The indictment alleges the $3.6 million Ponzi scheme defrauded approximately 160 investors in Los Angeles and around the southern California region. The indictment charges defendant Gonzalez with conspiracy, three counts of mail fraud, four counts of wire fraud, two counts of money laundering and one count of using a false social security number. Defendant Zaragoza is charged with a single count of money laundering.

The indictment alleges that Gonzalez and an unnamed co-conspirator operated the scheme out of an office in West Covina, California, under the names New Golden Investments Group, NGI Group and other related entities. The indictment alleges that Gonzalez and the unnamed co-conspirator misled investors by claiming to invest money into foreign currency and commodities, including gold and silver, real estate developments, and precious metal mines in Mexico. Investors were promised annual returns of anywhere from 60 to 120 percent. The indictment alleges that some advertisements in local magazines claimed the investment program was connected to the American Recovery and Reinvestment Act of 2009, also known as the Economic Stimulus Plan.

The investigation revealed that Gonzalez and the unnamed co-conspirator invested only a small portion of investors’ money into unprofitable ventures. Unbeknownst to investors, approximately $900,000 of investor money was used for personal expenses, including the lease of a luxury Mercedes-Benz S55 for defendant Gonzalez, and the purchase of gold and diamond jewelry, including Rolex watches, for defendant Gonzalez and the unnamed co-conspirator. The indictment alleges that investors were not told that their investments would be used to make interest payments to prior investors. The indictment further alleges that defendant Gonzalez failed to tell investors that he filed for bankruptcy in 2005, and that he was prohibited from re-entering the United States for five years after having been deported in September 2006. Defendant Zaragoza is alleged to have withdrawn the last remaining investor money from one of the accounts.

Defendants Gonzalez was previously arrested in connection with an immigration violation. Defendant Zaragoza was arrested last week on an arrest warrant for the money laundering charge. Both defendants are scheduled for arraignment on June 1, 2010.

If convicted on all charges, defendant Gonzalez faces a statutory maximum sentence of 175 years in prison. Defendant Zaragoza faces up to ten years in prison.

This case was investigated by the FBI’s Los Angeles Field Office and the Social Security Administration’s Office of Inspector General, with considerable assistance provided by U.S. Immigration and Customs Enforcement and the Commodity Futures Trading Commission. This case will be prosecuted by the United States Attorney’s Office in Los Angeles.