Last updated 8/11/2020 at 9:28am
Long-time San Diego business owner Gina Champion-Cain pled guilty in federal court on July 22 to conspiracy, securities fraud and obstruction of justice in connection with a massive years-long $400 million Ponzi scheme with hundreds of victims throughout California and the United States.
Champion-Cain, 55, spearheaded an operation that biked hundreds of investors. Instead of using investor money to fund short-term high-interest loans to individuals seeking alcohol licenses, she directed the money to companies she controlled between 2012 and 2019, according to the Securities and Exchange Commission.
While under oath in court, Champion-Cain, 55, admitted that she was the “mastermind” of the scheme, which is said to be the largest scheme of its kind discovered in this district.
Champion-Cain added that she lied and forged documents to hide the scheme, on top of shredding evidence in the course of an investigation by the SEC, conspiring 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.
Also entering a guilty plea was Crispin Torres, former Chief Financial Officer of American National Investments.
He pled guilty to a single charge of conspiracy.
Champion-Cain is the founder and principle controller of San Diego based company, The Patio Group, the former management company of La Casa Del Zorro Desert Resort and Spa. The Patio Group took over as a managing partner back in November of 2018, and she had invested $1 million into LCDZ. At the time of the fraud, LCDZ was completely unaware and were “shocked.”
Borregan co-owner Jack McGrory said at the time that it would no way affect their operations or future success.
According to the SEC, Champion-Cain told investors of American National Investments, Inc. that they could make a return on each license that was approved, but admitted in court that this was false. Instead, she fabricated documents and used the money to fund her other businesses like The Patio chain restaurants, and support her lavish lifestyle. She 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. In order to give her scheme a sense of legitimacy, she did make payments of interest and principal to investors of more than $200 million, according to the plea document.
Champion-Cain will be sentenced on Oct. 13, and is facing a maximum of 15 years of prison time for the three charges. However, she agreed to cooperate with the probe into the scheme she orchestrated, and this could possibly reduce her sentence in return, but a plea deal shows there is no agreement among prosecutors and Champion-Cain on her ultimate sentence.
She currently remains free on a $100,000 bond.