(CN) - A Pasadena-based investment company swindled people of $5 million in a Ponzi scheme, dozens of investors claim in Los Angeles Superior Court. Dozens of plaintiffs say Future Investments USA scammed them by claiming their investments were "guaranteed" and would pay monthly returns of 4 to 7 percent.
The plaintiffs say they were told "there was no possibility of Future Investments going out of business" because CEO Miguel A. Sanchez Jr. and CFO Richard Gurewitch had "vast experience" and had always paid investors 100 percent of their money.
Future Investments solicited about 200 Los Angeles-area investors through the LA Weekly online, its Web site, and oral presentations, then sent them phony account statements showing that their accounts were growing, according to the complaint.
But it was all a Ponzi scam, with old investors paid off with new money, the plaintiffs say.
Future Investments stopped making interest payments and ceased operations on in early 2009 and Sanchez and Gurewitch "absconded with millions of dollars which they had 'borrowed' from ... investors," the complaint states. The California Corporations Commission issued a Desist and Refrain Order against Sanchez and Future Investments in May 2009, the plaintiff say.
They also sued Agustin Bon Jr., an office manager.
Plaintiffs seek restitution, penalties and punitive damages for fraud, larceny, embezzlement, and other charges.
They are represented by James P. Segall-Gutierrez of Whittier.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.