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Debra Wong Yang
United States Attorney
Central District of California


United States Courthouse
312 North Spring Street
Los Angeles, California 90012
Release No. 06-057a

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PRESS RELEASE

FOR IMMEDIATE RELEASE
May 16, 2006
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947

WESTLAKE VILLAGE MEN ARRESTED FOR OPERATING $68 MILLION PONZI SCHEME THAT DEFRAUDED MORE THAN 70 INVESTORS


Los Angeles, CA - Two Westlake Village men were arrested at their residences early this morning on charges defrauding dozens of victims out of more than $68 million through an investment scheme, announced J. Stephen Tidwell, Assistant Director in Charge of the FBI in Los Angeles, Oscar Villanueva, Inspector in Charge of the United States Postal Inspection Service, and Debra Wong Yang, Unites States Attorney in Los Angeles.

Robert Alvin Coberly Jr. and Curtis Devin Somoza, both 38, allegedly orchestrated a Ponzi scheme in which they solicited $68 million from approximately 70 different investors, according to a criminal complaint filed in United States District Court in Los Angeles. Coberly and Somoza allegedly began soliciting individuals in 2003 to invest in their company, Persistence Capital. Coberly and Somoza told investors that their money would be used to purchase pools of life insurance policies on behalf of the Personal Involvement Center (PIC), a church-based organization in South Central Los Angeles. In return, a small portion of the death benefit would go to the family of the insured, but the majority of the money would be paid back to Persistence Capital. Investors were promised they would receive an annual return of 25 percent and were told their "risk-free" investments would eventually yield a five-to-one return.

The complaint alleges that only approximately $4.7 million of these funds were used to purchase two pools of life insurance policies, and that approximately $64 million was used by Coberly and Somoza to further their lavish lifestyles, including the purchase of houses, cars, boats and jewelry. Specifically, Somoza allegedly used the money to purchase items that include a 2003 Aston Martin automobile for $250,000; a 2003 Ferrari for $240,000, two 2004 Mercedes-Benz automobiles for a total of approximately $300,000; a 44-foot long 2005 MTI Supercat race boat for $290,000; and a Ulysses Nardine "Genghis Khan" model wristwatch for $447,000. Somoza also transferred approximately $9 million in investor funds to an unrelated business ventures.

Prior to the current investigation, which was initiated in June 2005, the Securities and Exchange Commission settled a civil suit with Coberly and Somoza that alleged they ran a Ponzi scheme through two companies, RC Investment and Pinnacle Investment. In the Pinnacle/RC scam, Coberly and Somoza offered and sold approximately $6.7 million worth of fraudulent "prime-bank" note investments to approximately 50 investors nationwide, but only used $3.1 million of investor funds to pay fictitious investment returns to existing investors. The rest was used for personal expenditures.

The SEC's suit was settled when the investors were repaid with interest. Subsequent investigation determined, however, that the prime note investors were repaid with $5 million that was solicited from an investor in a purported bond-trading program. A review of the financial records showed that none of that investor's money was used for any type of bond trading.

In addition to this morning's arrests, agents with the FBI, U.S. Postal Inspection Service and IRS-Criminal Investigation Division executed federal search warrants at the Westlake Village residences of Coberly and Somoza. When arrested this morning, Coberly was living in a $4 million house he purchased in part with funds stolen from investors in the earlier prime bank scheme that was broken up by the SEC. Somoza was living in a 27,000-square-foot house on 16 acres of land that he purchased with $3 million in investors' funds. Somoza's house is currently on the market with an asking price of $30 million.

Coberly and Somoza are scheduled to appear in federal court this afternoon.

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This investigation was conducted by the FBI and the United State Postal Inspection Service. IRS Criminal Investigation Division provided assistance during today's operation. This case will be prosecuted by the United States Attorney's Office in Los Angeles.

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Release No. 06-057a

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