SAN DIEGO (CN) – A 42-year-old Chula Vista man was sentenced Friday to 51 months in federal prison for taking more than $9 million from 190 people and banks in mortgage frauds. Moises Pacheco’s partner, Matthew “Beau” La Madrid already has been sentenced to 10 years.
Pacheco and La Madrid, high school pals, worked together out of La Madrid’s office until 2005, when Pacheco left to form his own “business,” as a mortgage broker and stock trader, in Chula Vista. He took more than $14.7 million for a so-called “AP Premium Value” family of funds, but did not make enough to make the payments he promised, so he ran it as a Ponzi scheme, prosecutors said, using new money to pay off old investors. Then in September he shipped La Madrid $3 million to try to make it back, and lost all of it.
Pacheco also was principal in a Real Estate Investment Group that lost millions of dollars. He funded both these scams through fraudulent mortgage loans.
“In total, Pacheco cheated more than 190 victims out of more than $9 million,” the U.S. Attorney’s Office said in announcing his sentence. “Many of his clients funded their investments by refinancing their houses and taking money from their retirement savings. When Pacheco’s scheme unraveled, scores of victims lost their homes and their financial futures. Several of those victims spoke during the sentencing hearing and tearfully explained how Pacheco’s fraud had ruined them.”
Pacheco was ordered to return to court on Nov. 18, to hear how much he must pay in restitution, and to go to prison. He pleaded guilty in March 2010 to conspiring to commit mail fraud, wire fraud, and bank fraud.
La Madrid was sentenced in July to 10 years and $23 million in restitution.
La Madrid’s brother, Lance, was sentenced in August to 2 ½ years and must pay $831,218 in restitution.
Eight more co-conspirators have pleaded guilty and await sentencing: Edgar Pacheco and Eduardo Alcaraz, Eric Montiel, Kevin Fallis. James Hyatt, Mark Busby, Christine
Busby, and Richard Kassler.