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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of California

FOR IMMEDIATE RELEASE
Wednesday, July 22, 2020

San Diego Business Leader Pleads Guilty to Masterminding a $400 Million Ponzi Scheme

Chief Financial Officer Also Pleads Guilty; Admits Using $60 Million in Investor Funds to Pay Unrelated Business Expenses

Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384
and Andrew J. Galvin (619) 546-9721

SAN DIEGO – Gina Champion-Cain, a long-time San Diego business leader, restauranteur and real estate magnate, pleaded guilty in federal court today, admitting that she committed securities fraud by masterminding a massive, years-long Ponzi scheme with hundreds of victims throughout California and the United States.

Champion-Cain also admitted that she lied and forged documents to hide her scheme, obstructed justice by attempting to destroy evidence in the course of an investigation by the U.S. Securities and Exchange Commission, and conspired with employees of her own company and the local branch of a national title company to both commit the fraud and cover it up. The fraud was committed through her companies American National Investments, Inc., and ANI Development, LLC.

Crispin Torres, the former Chief Financial Officer of American National Investments, also pleaded guilty today to conspiring in the scheme by using funds received from investors to prop up Champion-Cain’s other businesses, some of which were failing. 

 “This is by far the largest Ponzi scheme discovered in this district,” said U.S. Attorney Robert Brewer. “Gina Champion-Cain constructed and maintained a house of cards that has come crashing down around her and all her victims. The scheme deprived many investors of their retirement savings, and cost at least one investor tens of millions of dollars and forced him into bankruptcy. And now it will cost the defendant her freedom. We will continue our aggressive efforts to root out corporate fraud and hold greedy criminals accountable.” 

Brewer commended the great work of prosecutors Aaron Arnzen and Andrew Galvin as well as FBI agents and the Securities and Exchange Commission for unraveling this complicated, document-intensive fraud.

“This federal investigation revealed a $400 million-dollar fraudulent investment scheme by Gina Champion-Cain, a purported San Diego business magnate who was trusted by hundreds of investors,” said Acting FBI Special Agent in Charge Omer Meisel. “The FBI is committed to investigating those who engage in criminal conduct that corrupts the financial markets and defrauds the public. Furthermore, fraudsters will not escape justice by covering up or destroying evidence of their own wrongdoing. Obstructing a federal investigation is a serious criminal violation that the FBI will vigorously pursue and prosecute.”

As Champion-Cain admitted in her plea agreement, she raised money from investors by promising to use their money to make loans to business owners who were attempting to acquire California liquor licenses.  Since 2012, Champion-Cain drew in approximately $400 million from investors based on promises that she would use their money to fund those loans, the investors’ money would be safe in an escrow holding account, and the invested funds would and could only be returned to the specific investor who deposited the funds or his/her intermediary.

Champion-Cain admitted today that these promises were all false.  She never used the funds to make liquor license loans.  Instead, she and her co-conspirators simply used investor funds to pay back other (usually earlier) investors, and embezzled funds to support Champion-Cain’s unrelated businesses and her lifestyle.  For example, Champion-Cain admitted that she used at least $60 million in investor funds to meet payroll and other expenses incurred by several businesses she owned, including the Patio restaurant chain, vacation rentals, a juice bar, and the now-defunct Mission Beach surf-themed clothing store Luv Surf Boutique.  She also spent investor funds to pay herself over $2 million in cumulative salary since 2012, and spent over $640,000 for box seats at San Diego Padres games, over $200,000 for box seats at San Diego Charges games, at least $745,000 to pay off her credit card bills, and hundreds of thousands of dollars for automobiles, jewelry, and similar personal luxuries.

The plea agreement also details how Champion-Cain and her co-conspirators succeeded in defrauding investors by hiding the truth.  They fabricated documents, forged signatures, and told investors lies through fake email accounts so that when investors attempted to double-check on their investments with people they thought were independent third parties, the investors were often really communicating with Champion-Cain or her employees.  For example, Champion-Cain emailed an escrow company employee when investors tried to ask questions: “I told them NEVER to call and bother you ladies,” and “if they call asking about escrow agreements and alcohol licenses, blah, blah, blah … just say ‘SURE WHATEVER NOW SHOW ME THE MONEY … HAHAHAHA.’”  The cover-up continued even after Champion-Cain and her co-conspirators learned of a government investigation into her scheme—in response to which they attempted to destroy evidence they knew was incriminating, including stacks of documents, emails, video surveillance footage, and accounting records.

Crispin Torres, who also pleaded guilty today, had been an accountant at American National Investments for years.  As Chief Financial Officer, Torres knew that Champion-Cain’s other businesses were strapped for cash, and requested that Champion-Cain transfer at least $60 million of investor funds from escrow accounts so that Champion-Cain could keep these businesses afloat.  Torres also established a bank account under a name that was similar to the national escrow company’s name, and knew that Champion-Cain tricked certain investors into depositing their funds into this account believing the money would be safe.  When those deposits arrived, Torres, at Champion-Cain’s instruction, fabricated receipts from the escrow company to send to investors.  The purpose was clear – to convince investors that a reliable national escrow company administered their funds.  In fact, the escrow company had no connection with this particular bank account. Champion-Cain and Torres had unfettered access to these investor funds and simply stole the money to further the Ponzi scheme. 

Champion-Cain and Torres are scheduled to appear for sentencing before U.S. District Judge Anthony Battaglia on October 13 at 9 a.m.

CLICK HERE - Slides presented at press conference
CLICK HERE - Champion-Cain Plea Agreement
CLICK HERE - Torres Plea Agreement

DEFENDANTS                                                                                           

Gina Champion-Cain              Case Number 20CR2115        Age: 55           San Diego, CA

Crispin Torres                         Case Number 20CR2114        Age: 53           National City, CA

 

SUMMARY OF CHARGES

 

Securities Fraud, Title 15, U.S.C. Sections 77q and 77x (Champion-Cain)

Maximum Penalty: Five years in prison

 

Obstruction of Justice, Title 18, U.S.C. Section 1505 (Champion-Cain)

Maximum Penalty: Five years in prison

 

Conspiracy, Title 18, U.S.C. Section 371 (Champion-Cain and Torres)

Maximum Penalty: Five years in prison

 

 

AGENCY

 

Federal Bureau of Investigation

Topic(s): 
Financial Fraud
Press Release Number: 
CAS20-0722-Champion-Cain
Updated July 22, 2020