UPDATE, MAY 20, 4:30 P.M.: Orange County sheriff's investigators went to investigate a missing person and found a vast Ponzi scheme.
Laguna Niguel house flipper William Warren Baker, 59, pleaded guilty today to stealing more than $900,000 from
investors in a Ponzi scheme by fraudulently promising to buy, refurbish,
and re-sell distressed homes for a profit. The scheme was unearthed by detectives looking for Baker's elderly mother, who remains missing.
Baker copped to 13 felony counts of using untrue
statements in the purchase or sale of securities and one felony count of
grand theft from the United States Social Security Administration with sentencing enhancements and allegations for loss over $100,000,
aggravated white collar crime over $500,000, and property damage over
He could get up to 10 years in state prison at his July 15 sentencing in Santa Ana.
The home flipper met at least 10 investors through church, friends and other personal relationships. Baker's mother, 82-year-old Sara Jo Mowery, went missing in January 2009. Baker was arrested for fraud three months later.
According to prosecutors, the fraud probe revealed that after Mowery went missing, Baker siphoned funds from a joint account to which his mother's Social Security benefits were deposited.
The investigation into her disappearance continues.
ORIGINAL POST, MARCH 5, 2010, 7:40 A.M.: A Laguna Niguel man was arrested Thursday for allegedly bilking 10
people he met through church, friends and other personal relationships
out of more than $900,000.
William Warren Baker
fraudulently promised investors he would buy, refurbish, and re-sell
distressed homes for a profit, but what the 57-year-old really did was
engange in a Ponzi scheme, according to the Orange County District
In Ponzi schemes, investors are offered high, short-term returns
on investments, but instead of the investments generating actual income
and legitimate profits, the money from the investors is kept for the
benefit of the defendant or used to repay earlier investors.
has been charged with 13 felony counts of using untrue statements in
the purchase or sale of securities and 13 felony counts of selling
securities in issuer transactions without qualifications with sentencing
enhancements and allegations for loss over $100,000, aggravated white
collar crime over $500,000, property damage over $150,000, and property
damage over $200,000.
Baker is also accused of exchanging investor funds for promissory notes or
stocks without qualifying the investments with the California
Department of Corporations, as required by law.
The alleged embezzlement occurred between Jan. 20, 2006, and May 7, 2008, according to prosecutors. Baker allegedly failed to
purchase any property to be renovated and flipped as promised to his
He is accused of instead purchasing a property for
himself and transferring the property into trusts belonging to either his
son or wife.
The complaint alleges Baker used investor money for
personal expenses or to pay back old investors from previous ventures.
If convicted of all charges, Baker could get up to 32 years and eight
months in state prison.
Currently held on $1 million bail–he must prove that the money is from a legal and legitimate source
before posting bond–Baker is scheduled to be arraigned Monday in Santa Ana.