The United States Attorney's Office

DOWNEY MAN ARRESTED FOR BRIBING BANK MANAGER TO COVER UP BANK ACTIVITY RELATED TO PONZI SCHEME

A Mexican national who allegedly ran a bogus investment program that promised primarily Spanish-speaking victims a 100 percent return on their investments has been arrested on a federal charge of bribing a bank official who allegedly took payments in exchange for covering up activities related to the fraud scheme.

Juan Rangel, 44, was arrested Friday afternoon by special agents with the Federal Bureau of Investigation following the execution of a search warrant at his Downey residence. Rangel was named in a criminal complaint filed Saturday morning that accuses him of bribing an employee of a financial institution. Rangel is scheduled to make his initial court appearance this afternoon in United States District Court in Los Angeles.

The affidavit in support of the criminal complaint outlines an alleged scheme in which Rangel paid a branch manager with Bank of America to cover up bank activities in order to further his investment fraud scheme. Among other things, Ranel believed that in exchange for these payments the bank manager would accept large cash deposits and not file federally mandated Cash Transaction Reports, which are required for all cash transactions over $10,000. The affidavit goes on to allege that the cash was generated from a Ponzi scheme that Rangel operated, a scheme that took millions of dollars from victims who thought they were investing in a program to loan money to distressed homeowners. Rangel allegedly promised up to a 100 percent rate of return and encouraged victims to use money from home equity lines of credit to invest in the scheme that collapsed last month.

Rangel owned and operated Financial Plus Investments (FPI), which was based in Commerce. According to the complaint, FPI advertised heavily in Spanish-language media, such as the Rangel-backed magazine “Si,” Spanish-language flyers, and on radio and television. One of the flyers advertised FPI’s investment programs, promising investors a 100 percent return on their investments and explaining that if someone invested $25, they would gain an additional $25 on that investment. The advertisements assured potential investors that investments were protected, explaining that investments would be backed by “titles of property.”

However, according to a former FPI employee now cooperating with the FBI, a large portion of the investor money was personally taken by Rangel. Former employees, as well as investor victims, estimate that there were between 600 to 800 investors in FPI.

A former employee of FPI told FBI agents that Rangel was involved in multiple fraud schemes, including the FPI Ponzi that generated as much as $250,000 every day, according to the complaint. Co-workers warned the former employee not to invest any money in FPI.

The former employee, according to the complaint, told the FBI that investors often came to FPI’s office to complain about not receiving the promised return on their investment. At times, Rangel enlisted an associate to meet with these investors to intimidate them and to prevent them from withdrawing their funds. The former employee believed that the Rangel associate was paid a commission if he successfully convinced the investor not to withdraw their funds from FPI.

Rangel allegedly told the former employee that he had transferred a large amount of money to bank accounts in Pachuca, Mexico and that he would flee to Pachuca with his family. A search of the business on July 31 showed that more than $1 million had been wired to Mexico by Rangel, according to the complaint.

On July 25, FPI closed its doors. Dozens of investors went the offices, only to find the business shuttered, according the complaint. Some investors tried to cash FPI checks, but they were returned due to insufficient funds. These investors have so far documented more than $8 million in losses, but that figure represents losses associated with less than 150 investors.

The charge of bribing a bank official carries a statutory maximum sentence of five years in federal prison.

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.

The case against Rangel is part of an ongoing investigation by the Federal Bureau of Investigation.

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