Plea Agreement in $2.3M Real Estate Ponzi Scheme

Celia Gallardo admits in plea agreement she falsely promised victims high rates of return for investing in her purported real estate program

By Jason Kandel
|  Tuesday, Oct 16, 2012  |  Updated 1:04 PM PDT
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Plea Agreement in $2.3M Ponzi Scheme

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A real estate agent has agreed to plead guilty to federal charges that she ran a multi-million dollar Ponzi scheme out of companies based in the Santa Clarita Valley, the U.S. Attorney's Office said.

In a plea agreement filed Friday in United States District Court in Los Angeles, Celia Gallardo, 42, of North Hills, agreed to plead guilty to wire fraud for perpetrating the Ponzi scheme, officials said.

In the plea agreement, Gallardo admitted that she defrauded investors between September 2007 and September 2008 by falsely promising them high rates of return for investing in her purported real estate program.

Gallardo admitted that instead of investing victims’ money in real estate transactions, she spent the majority of the money on house payments, foreign luxury travel, cash withdrawals, and Ponzi payments to earlier investors.

The plea agreement details how one investor lost $500,000 after Gallardo pressured him to invest quickly with claims that her investment program consisted of buying unfinished condominiums for pennies on the dollar in Florida and Tennessee.

The victim borrowed money against his home in order to invest with Gallardo.

Instead of using the money to purchase real estate, Gallardo used this victim’s money to make Ponzi payments to earlier investors, pay her employees, withdraw cash, pay personal expenses, pay her mortgage, and go on a luxury Mediterranean cruise with close friends and family.

Gallardo admitted that her scheme caused losses of nearly $2.3 million to dozens of victims in California and Arizona.

Gallardo is expected to enter a guilty plea in court later this month.

Gallardo faces up to 20 years in federal prison and will likely have to pay her victims back, prosecutors said.

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