There’s good news for many victims defrauded in a fraudulent liquor license investment scheme by former San Diego restaurateur Gina Champion-Cain.
The federal court overseeing the receivership of Champion-Cain and its various entities recently approved a settlement between court-appointed receiver Krista Frietag, Chicago Title and a number of other victims.
“When combined with the other receivership recoveries, as well as the settlements of other victims’ lawsuits against Chicago Title, it appears that most victims will recover approximately 90% to 95% of their net losses, if not more,” said attorney Mark. Cramer, chairman of Buchalter’s Class Actions Practice Group, which represented about 80 of the victims of Champion-Cain’s Ponzi scheme.
Noting that there were about a dozen lawsuits filed against Chicago Title, Cramer pointed out, “In most cases involving Ponzi schemes, the victims are lucky to get pennies on the dollar. The recovery of the victims of the Champion-Cain scheme is a remarkable achievement in an otherwise tragic situation.
Cramer added that nearly all investment victims have deals with Chicago Title. Additionally, he said the court-appointed receiver had spent years assembling the assets of Champion-Cain and its various entities. “The receiver’s job is to try to identify, locate and save what was left when the scheme fell apart,” Cramer said, adding, “The receiver is trying to put Humpty Dumpty back together.”
Champion-Cain, a longtime San Diego entrepreneur, restaurant owner and real estate magnate, was sentenced in federal court to 15 years in prison for orchestrating a massive Ponzi scheme and obstructing justice by hiding and destroying evidence. federal investigators.
When Champion-Cain pleaded guilty on July 22, 2020, she admitted to raising more than $350 million from investors by promising to use their money to provide loans to business owners trying to acquire businesses. California liquor licenses.
However, according to court records, Champion-Cain and his co-conspirators instead used funds from new investors to pay off others whose investments would soon be redeemed, and diverted funds to support his other businesses and his lifestyle. .
Champion-Cain and his co-conspirators kept the scheme going by, among other things, fabricating documents, forging signatures and telling lies to investors through fake email accounts so that when investors attempted to re-verify their investments with third parties, they were often actually communicating with the defendant or its employees.
Cramer said his clients and all other victims believed their money was safe in escrow. “What is not reported enough are the emotional toll schemes like this on victims and their families. It takes more than money to heal these kinds of wounds,” he said, adding, “Looking back, many victims wonder, ‘Why didn’t I understand that? But the reality is that they are not alone. There are hundreds of victims of this scheme, including sophisticated people, banks and investment firms, who haven’t got it either.
Sentencing Champion-Cain, U.S. District Judge Larry Alan Burns told the defendant that his scheme demonstrated “incredible callousness” and “extreme greed” in committing a “monumental crime”.
“It’s an appropriate sentence for a defendant who caused significant harm to hundreds of victims,” Acting U.S. Attorney Randy Grossman said. “This Ponzi scheme cost investors hundreds of millions of dollars while the defendant lived in luxury.”
“For years, Gina Champion-Cain used her status in the community to lie, cheat and steal over a staggering $350 million, all from investors who trusted her with their hard-earned money and, in many cases, , their life savings. “, said FBI Special Agent in Charge Suzanne Turner. “While the victims have suffered greatly from the defendant’s betrayal, we hope the conviction will bring some closure as they see Champion-Cain being held responsible for the damages. that she 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.
Cramer pointed out that Champion-Cain was “using the proceeds from the Ponzi scheme to prop up his failing businesses, Airbnbs, restaurants and stores. She was taking money from investors to do payroll and cover overhead for her various businesses, which was part of the scheme.
Cramer concluded: “Every Ponzi scheme will eventually fail because the schemer cannot continue to generate enough money to repay early investors. Champion-Cain’s plan was no exception.
Comments are closed.