A Los Angeles County man has pleaded guilty to charges related to a $64 million Ponzi scheme that bilked more than 70 investors in California and Texas with false promises of huge returns from investments in a life insurance pool that would be marketed to members of African-American churches in South Los Angeles.
Curtis D. Somoza, 40, pleaded guilty Wednesday during jury selection of a trial that started on Tuesday. Somoza pleaded guilty to conspiracy, six counts of mail fraud, four counts of wire fraud and eight counts of money laundering
Somoza and co-defendant Robert Coberly claimed that the investors’ money would be invested in sophisticated bond trading programs or used to buy pools of life insurance policies purchased on behalf of parishioners of predominantly African-American churches in South Los Angeles. Investors were promised they would receive an annual return of 25 percent and were told their “risk-free” investments would eventually yield a five-to-one return. In fact, the majority of the investors’ funds were used by Somoza and Coberly to purchase multi-million dollar homes, cars, jewelry and to fund an extravagant lifestyle.
Somoza faces a maximum possible penalty of 285 years in federal prison when he is sentenced by United States District Judge A. Howard Matz on March 18, 2009. Somoza also agreed to a forfeiture $64 million in proceeds. He also agreed to forfeit personal property and automobiles seized at the time of his arrest.
Coberly previously pleaded guilty in the case and is scheduled to be sentenced by Judge Matz on December 15.
The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Assistant United States Attorney Jill Feeney
Deputy Chief, Major Frauds Section
Assistant United States Attorney Ruth C. Pinkel
Major Frauds Section