Former Glendale Heights Wealth Advisor Indicted on 50 Counts in Ponzi Scheme
Lawrence Leland “Lee” Loomis, 54, of Granite Bay, CA, was indicted Friday. He dealt with Glen Ellyn residents as the owner of the Glendale Heights-based Advantage Group Inc.
A former Glendale Heights businessman whose financial company had dealings with residents in the Glen Ellyn area has been indicted on 50 counts of mail and wire fraud, according to the FBI.
Lawrence Leland “Lee” Loomis, 54, of Granite Bay, CA, was indicted on Sept. 14 in California. Loomis was the owner of Advantage Group, Inc. in Glendale Heights, but more recently was operating as Advantage Financial Plan of California LLC and Loomis Wealth Solutions, according to the FBI.
The federal indictment alleges that Loomis and his father-in-law, John Hagener, 76, of Granite Bay, operated a Ponzi scheme in 2007 and 2008 that victimized more than 100 people and caused more than $7 million of losses related to the sale of shares in an investment program called the Naras Funds.
Loomis was also charged in the same indictment with five other defendants in two related mortgage fraud schemes that caused more than $10 million in losses to mortgage lenders and others, according to the news release from the FBI.
The fraud schemes are connected to a wealth-building program offered to the public through Loomis Wealth Solutions (LWS) in California, Illinois, Washington, and elsewhere from 2006 through 2008, according to the FBI.
“This large fraud scheme is the type of case that the President’s Financial Fraud Enforcement Task Force was designed to combat,” U.S. Attorney Benjamin B. Wagner said in the news release. “In this indictment, the grand jury charged the people responsible for running a mortgage lending company and an escrow company in a fraud scheme that spanned many states and cost lenders and investors tens of millions in losses. With the sentencing of Mr. Warren on Tuesday and these charges unsealed today, we are bringing to justice some of those who are responsible for the mortgage crisis in this district and elsewhere.”
According to the indictment:
- Loomis encouraged members who joined LWS:
- To purchase whole life insurance;
- To “harvest” home equity and retirement accounts to buy shares in the Naras Funds;
- And, to serve as “nominees” in the purchase of residential real estate controlled by Loomis.
Loomis promised members of Loomis Wealth Solutions that they could acquire real estate at no cost to themselves. Moreover, he said he would pay them more than $300 per month for each home they agreed to acquire and those payments could be applied to the life insurance premiums. He marketed his plan as “simply the best financial plan ever created.”
In addition, the indictment goes on to say:
In the Naras Funds Ponzi scheme, Loomis and Hagener are charged with falsely promising 12 percent annual returns in two investment funds: Naras Secured Fund #1 and Naras Secured Fund #2. According to the indictment, to induce people to invest in the Naras Funds, Loomis and Hagener falsely promised that the Naras Funds were invested in junior mortgages paying 14 percent annual returns. The two men also claimed that the Naras Funds were guaranteed by secured deeds of trust in residential real estate and by backing from a third-party company. According to the indictment, those statements were false. In fact, Loomis and Hagener used the money to pay operating expenses of various Loomis-controlled companies, to pay themselves, and to pay earlier investors. Loomis and Hagener are charged with mailing false monthly investment reports to victims and arranging wire transfers of victims’ home equity and retirement accounts to the failing Naras Funds in 2008.
According to a News 10 story, Loomis was arrested in Roseville, CA. on Friday and was being held without bail because the judge feared he was a flight risk.
A person who described himself as a former employee of Advantage Financial Group posted on the RipoffReport.com back in 2007. In it the former employee warns anyone considering doing business with the company to steer clear. The writer says: “It is only a matter of time until it takes a nosedive and anyone left with money in the program will loose it.”
The investigation was conducted by the FBI and the IRS. If convicted, Loomis and the other defendants face a maximum statutory penalty for each violation of mail and wire fraud of 20 years in prison, a $250,000 fine, and a three-year term of supervised release, according to the FBI. The actual sentences, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
If you had dealings with the company when it was located in Glendale Heights contact local editor Mary Ann Lopez at firstname.lastname@example.org.
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