ORANGE COUNTY (CN) - The California Attorney General has charged six men with running a Ponzi scheme that defrauded over 1000 largely elderly investors out of $52 million by saying the money was for golf resorts, and then using the funds to buy planes, cars, and vacations.
Under the charges filed late last week, Irvine-based Carolina Development Company solicited investments between 2001 and 2006 to buy and develop luxury resorts and upscale communities near golf courses, promising large returns and assuring investors that 85% of the money would go towards development.
The company purportedly claimed that Arnold Palmer had partnered with them, the famous golfer who was inducted into the World Golf Hall of Fame in 1974.
Some of the investors were senior citizens who invested their entire retirement funds, said the Attorney General.
According to the complaint, the six men diverted more than $24 million of the money toward bonuses, BMWs, concert tickets, and more. They kept the scam alive by paying old investors with money from new investments, said the complaint, a typical ponzi scheme.
Arnold Palmer was not part of the scam.
Deputy Attorney General Michael Whittaker is representing California against Lambert Vander Tuig, Jonathan Carmen, Mark Sostack, Scott Yard, Soren Svendsen, and Robert Waldman.
Vander Tuig and Carmen, the president and vice-president of Carolina Development, have been on the losing end of judgments for $29.2 million and $2.1 million respectively, in actions brought by the SEC in 2007.
If convicted, Vander Tuig and Carman could face more than 10 years behind bars. The others would likely face shorter sentences.
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