Lake Forest Woman Pleads Guilty in $3.5 Million Real Estate Investment Scheme that Targeted Orange County Investors
SANTA ANA, California – A Lake Forest woman who participated in a real estate investment scheme in which Southern California investors collectively suffered nearly $3.5 million in losses has pleaded guilty to federal charges.
Angel Bronsgeest, 55, pleaded guilty yesterday to one count of wire fraud before United States District Judge Cormac J. Carney.
In court yesterday, Bronsgeest admitted that she participated in a scheme in which victims were offered investments in a company known as The Equity Growth Group (TEGG). From through 2014, Bronsgeest and the man allegedly behind the scheme solicited victims during seminars in Orange County hotels offered by Investor Workshops, Inc.
The man who allegedly orchestrated the scheme – Shawn Patrick Watkins, 46, of Layton, Utah – was arraigned on September 1, 2016, after he surrendered to FBI agents in Orange County. Watkins is charged with nine counts of mail fraud, wire fraud and money laundering in an indictment that alleges he masterminded the scheme that defrauded at least 50 victims. Watkins allegedly presented himself as an expert in the field of real estate investment and attempted to gain trust by telling investors that he previously had worked in law enforcement.
As part of the solicitations, Bronsgeest admitted that she made false promises to investors. For example, investors were falsely advised that TEGG controlled hundreds of properties that generated rental income and TEGG would continue its growth by acquiring new properties. Investors were led to believe that they would receive substantial interest payments and that their money would be secured by collateral through the filing of deeds of trust on properties.
In reality, over the course of several years leading up to the collapse of TEGG, the company was not acquiring new properties and had a negative cash flow. Investor money was not used to acquire new properties, nor was it secured by collateral, and many victims did not receive interest payments. In fact, money that was paid to some victims as purported interest or a return on their investment came from investments made by other victims.
“This investment scheme was built on lies that began with false promises made during seminars to potential investors,” said United States Attorney Eileen M. Decker. “The falsehoods supported a Ponzi scheme that took money from unsuspecting victims for years and caused millions of dollars in losses. Investors must be wary of investment schemes that promise high rewards and no risk.”
“Defendant Bronsgeest knowingly took money from investors while knowing her offer was fraudulent,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Bronsgeest participated in this scheme in which her co-defendant, Shawn Watkins, used and overstated his brief history as a reserve deputy with law enforcement in order to gain the trust of investors, an exaggeration which ultimately got the attention of law enforcement officials and led to his undoing."
Bronsgeest is scheduled to be sentenced by Judge Carney on December 4. The charge of wire fraud carries a statutory maximum penalty of 20 years in federal prison.
Watkins is currently scheduled to go to trial on August 1 before Judge Carney.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
If convicted of the nine charges in the indictment – four counts of mail fraud, two counts of wire fraud and two counts of money laundering, Watkins would face a statutory maximum penalty of 180 years in federal prison.
The investigation in this case is being conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Gregory W. Staples of the Santa Ana Branch Office.