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Elk Grove man convicted in $36 million investment fraud scheme

Published: Thursday, Jan. 23, 2014 - 6:23 pm

A federal jury today found an Elk Grove man guilty in a $36 million investment fraud scheme.

Christopher Jackson, 46, was the last of six defendants who have been convicted for their participation in the scheme known as Diversified Management Consultants, or DMC, according to a federal Department of Justice news release. The conviction followed a seven-day trial in federal court in Sacramento.

According to court documents, between 2003 and 2009, DMC purported to help people invest money in real estate development and save their homes from foreclosure. In reality, authorities said, DMC was an investment fraud scheme that defrauded at least 180 people out of approximately $36.9 million.

U.S. District Judge Troy L. Nunley ordered Jackson remanded into custody immediately after the jury’s verdict. Jackson is to be sentenced April 10.

Jackson’s accomplices, Michael Bolden, 60; Victor Alvarado, 52; Nicholo Arceo, 40; Erica Arceo, 45; and Garry Bradford, 65, all of Sacramento, have pleaded guilty to charges of conspiracy, wire fraud and false statements. They await sentencing.

According to court documents and evidence at trial, DMC was an umbrella for the various defendants’ investment clubs. The defendants induced people to invest their ordinary savings, tax-deferred retirement savings and proceeds of cash-out residential loan refinancing. They told investors that their money would be used to purchase property and buildings for a real estate venture. Instead, the victims’ money went to pay other investors’ bogus returns on investment and to pay for the defendants’ personal expenses, including luxury lifestyle expenditures, authorities said.

Jackson was know as a “closer” among the DMC participants. His investment club, known as Genesis Innovations, recruited approximately 80 investors and took in more than $10 million. Many of Jackson’s victims invested all of their retirement savings with him based on his promise of a high interest rate and very little risk. Out of the $10 million, Jackson invested no more than $2.5 million in developing real estate, authorities said.

The evidence at trial established that he used the rest to pay false returns to other investors and to live in a way that Jackson himself compared to an entertainment or sports star. He used the Genesis Innovations account to drive a Lamborghini, a Rolls Royce, a BMW and a Land Rover. He also employed a personal chef and a bodyguard, who at times carried a metal briefcase in which Jackson carried cash.

Jackson took annual trips to Las Vegas, where he paid for an entourage of guests to join him at the finest hotels and restaurants, authorities said. He also spent more than $1 million on purchases, including jewelry and landscaping his house, with all the money coming out of the investment club account.

Michael Bolden pleaded guilty to wire fraud before trial. This was not Bolden’s first federal fraud conviction. In 1994, he was sentenced to 21 months in prison for conspiracy, loan fraud and securities fraud following an earlier federal investment fraud prosecution, authorities said.

Call The Bee’s Cathy Locke, (916) 321-5287.

Read more articles by Cathy Locke

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