After a long-term and complex investigation by law enforcement,
Loomis was charged, pleaded guilty, and sentenced earlier this year for
running a multi-faceted investment fraud/Ponzi scheme that caused
millions of dollars in losses to more than 183 investors.
reviewing voluminous amounts of evidence—including personal and company
records, real estate records, bank records, financial statements,
etc.—and questioning victims, employees of Loomis-owned entities, and
others, investigators learned that from 2006 through 2008, Loomis
offered what he called a “wealth-building program.”
seminars about his company held at hotels and casinos, he boasted of
unusually high rates of return for anyone who invested with him, and he
advertised individualized financial family planning to help prospective
clients earn money for college tuitions and retirement. Those attending
the seminars were then asked to submit financial information including
tax returns, pay stubs, copies of bills, and information concerning
their home equity. Loomis would analyze this information and—targeting
families with substantial home equity and good credit—invite them to a
private two-day workshop.
At these workshops, Loomis offered three different levels of investing:
1 investors had to purchase a whole life insurance policy indexed to
the stock market. What Loomis never told his clients was that he
received a referral fee of approximately $25,000 per policy from the
life insurance company he dealt with.
- Tier 2 investors were
strongly encouraged to refinance their homes, taking out all their
equity and investing it—as well as the funds in their retirement
accounts—in Loomis’ Naras Funds. Loomis even arranged for the
refinancing of his investors’ primary residences but often times steered
them into questionable loans.
- Tier 3 investors were invited to
purchase additional homes in areas like California, Arizona, and
Florida—especially selected for them by Loomis—with Loomis agreeing to
pay the mortgages and taxes and investors getting at least a $300 a
month return on each property. What he didn’t tell them was that he had
arranged for inflated appraisals on the properties, leading investors to
think they were paying a below-market price.
To help him
carry out his scheme, Loomis recruited his own father-in-law and six
other individuals—all of whom were charged. Five were ultimately
sentenced, including his father-in-law, but the sixth person named in
the indictment passed away before his sentencing could occur.
scheme was typical of any Ponzi scheme—he used some of the money he
received from newer investors to pay back original investors, but he
also used investor money to help pay business operating expenses and to
line his own pockets and the pockets of his co-conspirators. Very little
investor money was actually invested.
Eventually, running out of
money and impacted by the 2008 financial crisis, Loomis was unable to
keep his operation afloat. Clients—old and new—began complaining. And
the scheme began to collapse in on itself.
FBI and IRS
investigators talked to a number of clients, who all told similar
stories about the big promises Loomis made to them that were never kept,
and of losing their life savings, retirement accounts, and even homes
in some cases.
Law enforcement executed a search warrant on
Loomis’ office and home in August 2008. It took a while to conduct the
exhaustive investigation into all of Loomis’ financial affairs, but by
September 2012, a federal indictment was unsealed against Loomis and his
In January 2016, Loomis pleaded guilty before a
federal judge. He returned to court in July 2016 to face his sentencing,
but instead fired his lawyer, asked to represent himself, and—claiming
that he had been under duress at the time he accepted a plea
agreement—asked that his previous guilty plea be thrown out.
the judge rejected Loomis’ request to have his plea set aside, saying
he saw no evidence to support Loomis’ claim that he had been under
duress. And finally, in February 2018, Loomis appeared in court and was
sentenced to 12 years in federal prison.
“The FBI,” said
Sacramento Special Agent in Charge Sean Ragan after the sentencing,
“remains committed to working with its partners to ensure that people
who defraud the American people—often devastating their financial future
in the process—face justice.”