A 42-year-old Sacramento man has been sentenced to 14 years in prison for orchestrating a Ponzi scheme that defrauded family members, friends and other acquaintances of more than $2.7 million.
James Berghuis was convicted in October by a federal jury in Sacramento of four counts of mail fraud, four counts of wire fraud and one count of laundering money in the Sacramento-based scheme, according to a U.S. Attorney’s Office news release.
Evidence presented at trial showed that between 2005 and 2007, Berghuis persuaded certain investors to take out home equity loans to make their investments. He promised the investors that he would use their money to invest in hard-money loans, real estate transactions or the purchase of real estate franchises. He also offered several victims a deed of trust on his commercial property, promising each that they would be in second position on the title.
Instead, authorities said, Berghuis used investors’ money to pay back other investors and to buy himself luxury goods, including several Mercedes-Benz cars. He reportedly purchased a top-of-the-line S65 Mercedes-Benz worth more than $200,000 by signing over a check he had received from an investor earlier the same day. Berghuis then made a series of excuses to investors as to why he could not pay them back on the promised dates, the news release said.
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Some victims lost their homes or continue to pay on mortgages they took out to make their investments with Berghuis, authorities said.
The case resulted from an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.
Call The Bee’s Cathy Locke, (916) 321-5287.