By Sam Stanton
sstanton@sacbee.com
Two Sacramento-area men were charged today by securities regulators with running a massive Ponzi scheme that might be the largest mortgage fraud case in the history of the region.
The Securities and Exchange Commission said it charged Lawrence Leland "Lee" Loomis and his father-in-law, John Hagener, in a civil complaint, "with misappropriating approximately $10 million from more than 100 investors who were falsely promised that their money would be loaned to homebuyers and secured by real estate deeds of trust."
Investors were promised 12 percent rates of return, the SEC said, but federal officials say Loomis actually used the money to prop up other failing businesses.
The SEC says Loomis paid himself hundreds of thousands of dollars with investor funds and that Hagener received more than $190,000 for managing the funds.
The SEC complaint charges Loomis and Hagener with violating antifraud provisions of federal securities laws and seeks "injunctive relief, disgorgement of ill-gotten gains, and monetary penalties."
Loomis' attorney has said he is not guilty.
The probe began in 2009 after officials received tips from investors and former Loomis workers, and in August FBI agents raided Loomis Wealth Solutions offices in Roseville.
Three men charged in the case earlier fled the country. One was captured in Barcelona, Spain. Another was arrested as he entered the United States from Canada with $70,000 stuffed in his shoe. A third remains at large.
Call The Bee's Sam Stanton, (916) 321-1091.
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