The owner and operator of a Santa Ana investment firm that advertised safe investments in the pages of the Orange County Register and Los Angeles Times has been sentenced to 144 months in federal prison for operating a Ponzi scheme that collected more than $10 million from more than 35 victims, many of whom were elderly.
United States District Judge Cormac J. Carney in Santa Ana also ordered Innovative Advisory Services, Inc. owner Richard H. Nickles, 59, of Irvine, to pay $6.8 million in restitution.
Moxley spelled out the case against Nickles here:
Nickles pleaded guilty in June 2011 to mail fraud and securities fraud, admitting that he used phrases in his advertisements like "U.S. Government Guaranteed," "FDIC Insured," "Guaranteed," or "Insured."
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The ads also stated there was a "$50,000 Minimum Investment," and after being contacted by potential investors, Nickles met with them and offered investments in various low-risk bonds. But instead of investing the money, Nickles used it to pay off prior investors or trade in unauthorized securities.
He sent his marks phony documents to hide the scam, and transferred hundreds of thousands of dollars into his and family members' personal accounts, including $170,000 that was sent to banks in the Turks and Caicos.
The Securities and Exchange Commission brought a related suit against Nickles, who has been in federal custody since July 9, 2010, when FBI agents swooped into his Santa Ana office during a meeting with two victims.
"Investment fraud schemes that target senior citizens are particularly sinister," says U.S. Attorney Andre Birotte Jr. in a statement from his LA office. "Mr. Nickles went to great lengths to disguise the criminal nature of his scheme, and his actions caused harm to many investors, including the elderly victims who trusted his false promises. This lengthy sentence in federal prison should serve as a warning to others who want to follow in Mr. Nickles' footsteps: the end of the line for con men is a prison cell." Follow OC Weekly on Twitter @ocweekly or on Facebook!