Four Defendants Indicted for Securities Fraud, Conducting International Pump-and-Dump Scheme, and Money Laundering
Assistant U. S. Attorney Aaron P. Arnzen (619) 546-8384 and Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – March 31, 2021
SAN DIEGO – Gina Champion-Cain, a long-time San Diego business leader, restauranteur, and real estate magnate, was sentenced in federal court today to 15 years in prison for masterminding a massive, years-long Ponzi scheme and obstructing justice by hiding and destroying evidence from federal investigators.
When she pleaded guilty on July 22, 2020, Champion-Cain admitted that she raised more than $350 million from investors by promising to use their money to make loans to business owners who were attempting to acquire California liquor licenses. The investors were unaware, however, that Champion-Cain was not keeping her promise.
According to court records, Champion-Cain and her co-conspirators instead used funds from new investors to pay back others whose investments would soon be redeemed, and embezzled funds to support her other businesses and her lifestyle. Champion-Cain and her co-conspirators kept the scheme going by, among other things, fabricating documents, forging signatures, and telling investors lies through fake email accounts so that when investors attempted to double-check on their investments with third parties, they were often really communicating with the defendant or her employees.
In handing down the sentence, U.S. District Judge Larry Alan Burns told the defendant that her scheme demonstrated “tremendous callousness” and “extreme avarice” in committing a “monumental crime.”
“This is a fitting sentence for a defendant who caused significant harm to hundreds of victims,” said Acting U.S. Attorney Randy Grossman. “This Ponzi scheme cost investors hundreds of millions of dollars while the defendant lived in luxury. We will continue our aggressive efforts to prosecute those who swindle, deceive and bring financial devastation to victims.”
“For years, Gina Champion-Cain used her status in the community to lie, cheat, and steal more than a staggering $350 million dollars - all from investors who trusted her with their hard-earned money and, in many instances, their life's savings,” said FBI Special Agent in Charge Suzanne Turner. “While the victims have suffered significantly from the defendant's betrayal, we hope today's sentence will bring some closure as they see Champion-Cain being held accountable for the damage she has caused. Let this serve as a warning that the FBI is dedicated to protecting the community from criminals, like Champion-Cain, who commit investment fraud.”
Crispin Torres, the former Chief Financial Officer of one of Champion-Cain’s companies, was sentenced on March 23, 2021 to four years in prison for using funds received from investors to prop up Champion-Cain’s other businesses.
Throughout her scheme, Champion-Cain made agreed-upon payments to her investors so that they would continue to believe that the supposed investment program was legitimate, according to court filings. This, in turn, helped her perpetuate the scheme and recruit more victims. Champion-Cain also stole tens of millions of dollars of investor funds to keep her other businesses afloat and enrich herself. Because many of Champion-Cain’s restaurant and retail businesses were failing or had negative cash flow, they needed funds to meet expenses. Time after time, Champion-Cain and Torres worked together to steal millions of dollars of investor funds to cover the shortfall. Champion-Cain also spent millions of investor dollars to pay for her own salary, box seats at professional baseball and football games, credit card bills, automobiles, jewelry, and other personal luxuries.
Champion-Cain’s plea agreement also describes her efforts to obstruct federal investigations into the scheme. Beginning in July 2019, after learning of investigations being conducted by federal agencies, she instructed her employees to destroy emails; not produce electronic calendar, messaging, and trash files; alter accounting records to hide the fact that investor funds were used to pay her personal expenses; and shred paper records. Champion-Cain even attempted to solicit an investment of $150 million in the hopes that she could use the funds to hide her scheme. Despite her efforts, investigators were able to recover a significant volume of the evidence Champion-Cain attempted to destroy.
Grossman praised the lead prosecutors on the case, Assistant U.S. Attorneys Aaron Arnzen and Andrew Galvin, as well as investigators and attorneys from the Federal Bureau of Investigation and the Securities and Exchange Commission, for their excellent work on this case
Case Number 20CR2115-LAB
Gina Champion-Cain Age: 57 San Diego, CA
Case Number 20CR2114-LAB
Crispin Torres Age: 53 National City, CA
SUMMARY OF CHARGES
Securities Fraud, Title 15, U.S.C. Sections 77q and 77x (Champion-Cain)
Obstruction of Justice, Title 18, U.S.C. Section 1505 (Champion-Cain)
Conspiracy, Title 18, U.S.C. Section 371 (Champion-Cain and Torres)
Federal Bureau of Investigation