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August 22, 2011


Filed under: California Defense Attorney — Tags: , , , — fayarfa @ 2:25 pm

LOS ANGELES – A resident of Topanga has been sentenced to 108 months in federal prison for running a 15-year-long investment scam that targeted retired train and bus operators and caused more than $7 million in losses.

Thomas L. Mitchell, 64, was sentenced late yesterday afternoon by United States District Judge Gary A. Feess. In addition to the nine-year prison term, Judge Feess ordered Mitchell to pay $7,001,255 in restitution to approximately 60 victims.

Mitchell pleaded guilty in April to mail fraud, specifically admitting that he operated a Ponzi scheme from 1995 through June 2010. During the course of fraud scheme, Mitchell collected approximately $15 million from about 150 retired individuals. Many of the victims lost most or all of their retirement savings.

During yesterday’s sentencing hearing, Judge Feess said Mitchell’s conduct was “egregious,” the scheme featured a “level of deception [that] was remarkable,” and Mitchell must have had “no motive except for greed.”

Mitchell operated or used several companies in Los Angeles and Santa Ana to perpetrate his fraudulent scheme, which targeted retirees, many of whom had been employed as transit operators by the Los Angeles County Metropolitan Transportation Authority. Mitchell portrayed himself as a successful investment advisor and falsely promised high investment returns through stocks, bonds or real estate. He also promised that his investments were safe – including falsely telling at least one victim that her principal was insured by the United States government. With these and other false claims, Mitchell convinced the victims to transfer their retirement funds from their employers’ retirement plans into accounts that he controlled.

In reality, Mitchell ran a Ponzi scheme and “placed only a minuscule fraction of the retiree victims’ money in legitimate investments,” according to the statement of facts in his plea agreement. “Moreover, instead of taking steps to protect the retiree victims’ principal investments, [Mitchell] misappropriated virtually all of their money to, among other things, live a lavish lifestyle,” which included a luxury apartment, three luxury automobiles, expensive vacations, high-end restaurants, and tickets to sporting events and shows. About half of the investors’ money was used for Ponzi payments that purported to pay investment returns to other victims.

“Mr. Mitchell committed an audacious fraud that spanned many years and devastated many victims,” said United States Attorney André Birotte Jr. “He was able to lead a luxurious lifestyle by stealing the life savings of hard-working men and women who only sought a dignified retirement. For his criminal conduct, Mitchell richly deserves his nearly decade-long prison sentence.”

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