GRASS VALLEY - The state Attorney General's Office says a Grass Valley real estate company stole from and defrauded investors, many of them long-time clients, in a long-time Ponzi scheme.
Victms lost more than $2.3 million in their dealings with Gold Country Lenders, state prosecutors allege.
Gold Country Lenders CEO Philip Lester, 65; his wife Ellen Lester, 65; CFO Susan Laferte, 58; and Jonathan Blinder, 58, were arrested Thursday and charged with securities fraud, conspiracy and elder abuse for their alleged roles.
According to the arrest declaration, from January 2003 to June 2011, Gold Country Lenders sold securities on real estate developments, promising investors with returns of 8 to 12 percent annually. The securities were supposed to be secured by deeds of trusts of the properties. But investigators found some of the trust deeds were never recorded while other were secondary to other loans.
Filed documents allege Philip Lester did not tell investors he had a partnership interest in some of the projects sold to investors nor that some of the land to be developed had toxic waste problems.
The attorney general's investigation allege money put up by investors was used to pay earlier investors or for purposes other than the real estate projects. As an example, investor funds were used to buy and operate the Auburn Valley Country Club where the Lesters lived.
Philip Lester and Laferte, his sister, each face 66 counts of securities fraud, conspiracy and elder abuse, all felonies. Bail was set at $600,000 for each.
Ellen Lester is accused of two counts of felony conspiracy and securities fraud, with bail set at $50,000. Blinder is looking at four felony counts of securities fraud. He posted bail from Nevada County Jail.