California Man Sentenced for Ponzi Scheme

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Attorney General Kamala Harris announced the prison sentence for a Northern California convicted of defrauding the elderly out of more than $90 million. James Koenig, 60, was sentenced to nearly 42 years in prison by the Shasta County Superior Court on Friday for his role in this Ponzi scheme that was operated in the Bay Area. He will also face a restitution hearing in the coming months.

Koenig was found guilty in May of 35 counts of conspiracy, scheming to defraud with selling securities, selling securities by false statements, and residential burglary in relation to the fake investments. According to the release, the scheme started while Koenig was running Assent Real Estate Corporation from 1999 to 2008. This company was involved in the buying, managing, and selling of properties that included elder care facilities and other commercial properties.

Koenig hid his scheme and refused to tell investors in his company that they were doing so poorly financially. The funds that were collected from new investors were used to pay off the original investors and resulted to over $163 million worth of debt in 2007. Assent stopped making payments to investors in April of 2007 but did continue to sell securities to its new “investors.” The Ponzi scheme collapsed in 2008.

Of Koenig’s 400 victims, 32 brought this case against Koenig. Combined, these victims had lost more than $8 million. According to Attorney General Kamal Harris, Koenig also failed to disclose to investors that he had previously been convicted of mail fraud.

An accomplice in this scheme, Gary Armitage, was given a 10 year prison sentence in April.

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