Seniors Were Targeted in Assisted-Living Ponzi Scam, Say Dozens in California Filing

      REDDING, CALIF. (CN) – A scam artist sytematically took advantage of elderly investors by running a ponzi scheme at 22 old folks homes, according to a fraud action filed against James S. Koenig and Asset Real Estate & Investment Co. in Northern California.

     Koenig and a slew of corporations face three lawsuits accusing them of defrauding senior citizens in Ponzi schemes involving nearly two dozen senior assisted-living housing facilities.
     The defendants promised profits and equity to elderly investors, then repeatedly and systematically bought them out, taking lucrative commissions while failing to pay property taxes, subjecting the investors to penalties and threats of foreclosure and preventing them from collecting rents as promised, according to a sample case, a RICO claim in Shasta County Court.
     Accused of running the scam with Koenig, in all three cases, is Gary T. Armitage. They are accused of running scams at 22 senior housing facilities since 2000.
     “Defendants have twenty-two senior facilities in which they continuously and systematically buy out previous investors and simultaneously turn around and sell to a new group of investors, all to their financial gain and at the detriment of the previous investors,” the complaint states. “Each time Defendants churn the properties in this matter, Defendants receive substantial commissions and/or fees and pull out all the equity in the properties for themselves, which should have gone to the previous investor. Defendants have set up and continue to run a class Ponzi scheme.”
     Plaintiffs in this case include 24 individuals, 22 LLCs, and others, including family trusts. They say Koenig was criminally convicted for his investment schemes in 1986.
     Represented by Maire & Beasley of Redding, plaintiffs demand punitive damages.
     Here are the defendants in this case: Asset Real Estate & Investment Company; Sierra Senior Housing LLC; West Senior Housing LLC; AREI Senior Housing Properties LLC; AREI Management Interests Inc.; Capital Resources Fund LLC; Asset Properties LP.; Aga Financial Services LLC; EPlanning Advisors Inc.; EPlanning Securities Inc.; IMS-GA LLC; Lakeside Financial Group Inc.; James S. Koenig individually; Sundial Trust; and Gary T. Armitage individually.
     Plaintiffs in two related cases in Shasta County, involving many of the same defendants, and others, are represented by Aron Oliner with Duane Morris of San Francisco.

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