Business partner of radio host Barbra Alexander guilty of fraud
A Seaside man and business partner of a oncepopular local talk show host was Nate Washington Jersey convicted Wednesday of federal mail fraud, securities fraud and conspiracy, all involving investment management companies that diverted more than $4 million for personal use by the partners.
Michael Swanson, 62, of Seaside was a partner with "MoneyDots" radio producer Barbra Alexander in the Montereybased firm APS Funding, which offered "hardmoney," shortterm, highinterest loans, mostly for business and real estate development.
Swanson and Pi were indicted along with Alexander in October 2010 as a result of an investigation by the Securities and Exchange Commission, the FBI and the Monterey County District Attorney's Office.
Alexander, of Monterey, has pleaded innocent and is scheduled for trial Nov. 4, said prosecutor Jeffrey Schenk.
Swanson separated his case from Alexander's, and his trial began in San Jose on Aug. 13.
Twelve of the original 43 counts were dismissed when the trial began, and the jury acquitted Swanson of two additional wire and mail fraud charges. At one point, jurors' notes show, the jury sought clarification as to whether emailed messages constitute mail fraud.
Federal prosecutors said APS Funding attracted few borrowers and made few loans but defrauded most of its 60 investors, including many from Monterey County. For a time, prosecutors said, APS operated as a pyramid scheme, with money from new investors being used to make payments to old investors.
A federal civil suit against Alexander, Swanson and Pi filed by the Securities and Exchange Commission has been delayed since early 2011 until the criminal trial is completed.
But a federal judge did allow depositions in that case to be taken right away from three alleged victims one with brain cancer and two who were in their 70s.
While her codefendants did not object to the http://www.footballtitansshop.com/91_derrick_morgan_jersey_authentic_black_limited_cheap.html early depositions, the judge noted that Alexander protested that the two older witnesses "may be of advanced age but they are very active and I don't believe you're in any danger of losing them during the stay."
Though Judge Lucy Koh said she hoped all the witnesses remained healthy and active for many years, she agreed to let the SEC depose all three witnesses.
The SEC alleged in its original complaint that Alexander used $200,000 in investors' money for a kitchen remodel in her rented Monterey home.
"Indeed, when the remodel was complete, a number of investors attended a house party thrown by Alexander without knowing that their money had paid for all of the improvements," the complaint alleged.
The criminal complaint alleges that more than a third of the money collected from investors, $2.5 million, was "siphoned off by Alexander, Pi and Swanson and funneled to themselves and the various entities they owned," the complaint states.
Alexander took $1.6 million for herself and her businesses, including investing in her "MoneyDots" show, while Swanson and Pi split the remaining $900,000, according to the complaint.
For much of 2008 and all of 2009, the three partners paid themselves at least $30,000 a month but didn't make any legitimate loans, according to the complaint.
The SEC alleged that although most of the existing investments were "in some state of arrears," the three continued to solicit new investors while providing existing customers with fabricated interest statements.
A financial statement for 2010 filed with the court showed a number of uncollectible debts from the three partners, including more than $535,000 in one "note receivable" from Alexander.
In 2009, FBI agents served search warrants at the Monterey County homes of Alexander and Swanson, as well as a residence owned by Pi in Idaho.
Several statelevel lawsuits are slowly making their way through Monterey County www.footballtitansshop.com/85_nate_washington_jersey_authentic_black_limited_cheap.html courtrooms.
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