LOS ANGELES (KNX) — A former financial advisor was sentenced Monday to 14 years in federal prison for a real estate investment scam that caused clients (many of them elderly) to lose more than $12 million in retirement savings.
Paul Ricky Mata, 58, formerly of Upland and now of Oceanside, was ordered to pay $12,560,385 in restitution to his victims, in addition to his sentence, according to the U.S. Attorney’s Office.
From 2008 and 2015, Mata was accused of persuading victims to invest in several of his businesses. He failed to disclose a checkered disciplinary history in Nevada, California, and at the federal level, including a one-year suspension and $100,000 fine imposed by the Financial Industry Regulatory Authority (FINRA) and a three-year suspension by the Certified Financial planner Board stemming from “various forms of misconduct, including omitting material facts necessary to make other statements not misleading,” according to the U.S. Attorney’s Office.
Mata reportedly induced victims to hand over money to one of his firms, Secured Capital, a real estate investment scheme purportedly based in “government-backed tax liens,” “asset-backed deed certificates,” and distressed commercial and residential properties. Mata guaranteed returns generating annual rates of 5 to 10%.
He failed to inform victims that investments in Secured Capital had “significant loss risks” and did not turn a profit from 2011 onward.
In addition, instead of investing clients’ money, Mata used Secured Capital funds to pay for his own lavish lifestyle, including a $197,000 down payment on a home in Upland, loans to himself, and $370,000 in cash transferred to his personal bank account.
Mata also made false statements on bankruptcy filings in 2016, including that he had not used any business aliases in the previous eight years, and that he had not filed for bankruptcy during that time either. In fact, Mata had filed for bankruptcy at least once prior in 2010.
At a bankruptcy hearing in 2016, prosecutors alleged Mata lied when denying he transferred any assets to family or friends in the previous four years when in fact, one month prior, he transferred his car to his daughter and his home to his wife.
In 2015, the U.S. Securities and Exchange Commission filed a lawsuit against Mata and two other associates, alleging they operated the real estate scam. Later that year, the SEC won a judgment against Mata, forcing him to pay more than $11 million in restitution. That same year, the state Department of Business Oversight obtained a permanent injunction against him, as well as an additional $14 million restitution order and $6.3 million in fines.
Mata pleaded guilty to 17 felonies in July, including 11 counts of mail fraud, three counts of wire fraud, one count of making a false statement in a bankruptcy proceeding, one count of concealing assets in bankruptcy, and one count of making a false oath and accounts in bankruptcy.
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