Man convicted in Ponzi scheme sentenced to 14 years in prison
A Loma Linda man was sentenced Monday to 14 years in federal prison for his role in a Ponzi scheme that collected almost $20 million from hundreds of investors in Southern California -- and lost more than $16 million, federal prosecutors said.
David Lincoln Johnson was convicted almost a year ago of 14 counts of mail fraud for his part in the scheme, which prosecutors said he orchestrated with two others. Johnson, 73, will have to pay $17.2 million in restitution, in addition to serving the prison time, prosecutors said.
Johnson was the last of the three to be sentenced, prosecutors said.
Prosecutors said Christiano Kawika Hashimoto Jr., 52, of Riverside solicited potential investors for his company, Financial Solutions, of which he was founder and president. He told would-be investors that Financial Solutions raised money to invest in other companies, including Johnson's company, Gentech Fabrication.
Potential investors were told that money given to Gentech was for a government contract, so their investments would be guaranteed.The investors were even taken on tours of Gentech facilities and given promotional material explaining what their money would support.
Johnson gave investors promissory notes that told them they would receive a return of their investment, plus interest -- as much as 20% -- within a month. But rather than fund Gentech construction projects, prosecutors said, the money went to pay other investors and the commissions for sales agents.
Hashimoto was sentenced in December 2011 to 10 years in prison after he pleaded guilty to a single mail fraud count. Another partner in the scheme, Catherine Lipscomb, 44, of Moreno Valley was sentenced in November 2011 to two years in prison after she pleaded guilty to a single count of mail fraud.
"Hundreds of investors collectively lost millions of dollars -- many believing they were engaging in a patriotic duty to help their government," Leslie P. DeMarco, an IRS special agent in charge of the Los Angeles field office's criminal investigation unit, said in a statement. "Some investors lost their homes and their life savings. Many investors lives were nearly destroyed."
-- Rick Rojas