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SCV Ponzi Scheme Architect Faces Sentencing In May

When Celia Gallardo, 42, of North Hills, is sentenced in May in a federal courtroom, there will be plenty of Santa Clarita Valley residents paying attention, according to a victim who said Tuesday he was milked out of about $200,000.


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                                                                                                                                 Celia Gallardo

“She would get investors like myself and she’d tell us that she’d triple our money within 90 days,” Montoya said.

“The thing that really irks me is that she may only get a couple of years, whether there’s restitution or not,” he added, mentioning a family member who also lost his retirement to Gallardo’s scam.

Gallardo pleaded guilty to running a multimillion dollar Ponzi scheme from Santa Clarita-based companies Oct. 12, 2012.

In the plea agreement, Gallardo admitted that she defrauded investors from September 2007 through September 2008 by falsely promising them high rates of return for investing in her purported real estate program.                                                                                                   

“Gallardo admitted that instead of investing victims’ money in real estate transactions, she spent the vast majority of the money on house payments, foreign luxury travel, cash withdrawals, and Ponzi payments to earlier investors,” according to a statement from Andre Birotte, a federal district attorney for the U.S. Central District, who’s in charge of prosecution.

Montoya also wants to make sure that Gallardo isn’t able to ever victimize anyone else ever again, whenever she is eventually released.

“I just want to make sure that for the record, it’s publicly known and it doesn’t get swept under the rug,” Montoya said. “I want to make sure that it’s out there and she gets branded and it’s on every search engine.”

The plea agreement details how one investor lost $500,000 after Gallardo pressured him to invest quickly with claims that her investment program consisted of buying unfinished condominiums for pennies on the dollar in Florida and Tennessee.

This victim borrowed money against his home in order to invest with Gallardo.

Instead of using the money to purchase real estate, Gallardo used this victim’s money to make Ponzi payments to earlier investors, pay her employees, withdraw cash, pay personal expenses, pay her mortgage, and go on a luxury Mediterranean cruise with close friends and family.

A statement from Birotte’s office indicates a maximum of a 20-year sentence for Gallardo’s crime, one count of wire fraud, but a District Attorney spokesman said it was “unlikely” Gallardo would face that penalty.

A federal judge has discretion in sentencing, according to Thom Mrozek, public affairs officer for the United States Attorney’s Office for the Central District.

“What a judge looks at to impose a sentence, is, if we have a sentencing memo (with a suggested sentence),” Mrozek said, adding that the sentencing guidelines are in a “giant, phonebook-sized book that attempt to take into account a number of factors.”

The nonbinding guidelines offer suggested penalties associated with myriad factors that include everything from the number of victims to the severity of the crime to the criminal’s past record, he said

“She will almost certainly get a reduced sentence for an acceptance of responsibility,” Mrozek said.

While he said a sentencing memo had not yet been filed, he shared court documents that indicated a few of the factors that will be mentioned in Gallardo’s May 2 hearing.

Under federal guidelines, the base offense level is 7, on a scale of 0-43. The fact that the loss was more than $1 million adds a factor of 16, and the fact that there was more than 10 vicitms adds a factor of 2.

The terms of the negotiation include a reduction of 2, or possibly 3, which approximate Gallardo’s offense level at 23.

This would indicate a sentence in the range of 46-57 months, assuming no prior convictions. However, a judge is not obligated to follow these guidelines, Mrozek said.

 

The federal criminal justice system does not allow for parole, and all criminals must serve at least 85 percent of their sentence, Mrozek added.

 

“The question remains,” Montoya said. “What happened to the rest of the money?”

Click here for a link to the original story.


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