A Laguna Niguel man surrendered to the court Thursday on a $17 million warrant for his role in a $150 million investment fraud Ponzi scheme, the largest to be prosecuted in Orange County history, according to the district attorney's office. The scam involving investors in a printing business stung at least 80 Orange County victims for more than $21 million, prosecutors added.
Before turning himself in, Adam Jay Boskovich, 43, had been charged Tuesday with 32 felony counts.
Conviction on all counts of use of untrue statements in the purchase or sale of a security—plus a sentencing enhancement allegation for causing over $100,000 in losses—could send Boskovich to state prison for 45 years.
Hes accused of running a scam within a much larger, possibly $200 million nationwide scam by accused mastermind Gerard Frank Cellette, 48, formerly of Anoka County, MN.
Cellette faces up for 104 years in a California prison for a scam he allegedly pulled off without stepping foot in the Golden State. He owned and operated Minnesota Print Services, Inc. out of his home in Andover, falsely claiming he had large printing contracts with major corporations and seeking investors for fake printing projects with the promise of 10 to 15 percent returns on investments, according to a previous statement from the Orange County District Attorney's office (OCDA).
He presented would-be investors "deal sheets" with the names of corporate clients, total contract prices and time periods within which investments would come to fruition with interest payments (generally 60 to 90 days). The problem was, according to the OCDA, all this was phony information.
Like other Ponzi schemes, early investors who bought in received what they thought were interest payments but were instead portions of the investments of others who joined later, according to the prosecution. Cellette's marks are said to have been spread out across the country—in Minnesota, Georgia, Arizona, Colorado, Hawaii, Illinois and California—especially Orange County. One local who visited Minnesota and bought Cellette's line in 2005 apparently returned home and convinced three others to not only join him in buying in but of recruiting family, friends and business associates to become investors as well.
Three of those OC friends became suspicious when payments slowed down and asked for copies of certain financial records from Cellette, who is accused of turning over false documents. The three Orange Countians flew to Minnesota in September 2009 to match those documents against legitimate bank records, which exposed the Ponzi scheme, according to prosecutors.
Cellette is accused of rolling his ill-gotten profits into luxury personal items, including cars, time on private jets, and multiple homes with features including a Go-Kart track, bowling alley and 1950s-style malt shop. He's now being held on $21 million bail and must prove the money is from a legal and legitimate source before posting bond. His next scheduled court appearance is a preliminary hearing on Tuesday in Santa Ana.
One of the three OC men who went to Minnesota was Boskovich, according to the OCDA, who said when he and the other two men had thought the scheme was legit when they acted as unofficial brokers for Cellette in Orange County and throughout California. They recruited investors among family members, friends and personal and professional associates.
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But Boskovich at one point strayed off the reservation, simultaneously conducting his own scheme by misrepresenting or falsifying information to investors in order to collect higher investments, and therefore receive higher commissions, according to the OCDA. He is accused of falsely indicating to investors that he had personally examined Cellette's operations, contracts, and insurance policies, prosecutors add.
Boskovich is accused of being responsible for facilitating $17 million in investor losses out of the $21 million Orange County portion of the scam. He allegedly collected more than $1 million in commissions in the Ponzi scheme.
That was also the amount of his bail, which he posted before being released from custody pending a continued arraignment hearing scheduled for Dec. 20 in Santa Ana.