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Long Beach man pleads guilty in Ponzi scheme

February 17, 2010 12:00:00 AM PST
A 33-year-old Long Beach man pleaded guilty to federal wire fraud charges Wednesday.Jon Weldon James is accused of running a $33 million Ponzi scheme.

In a Los Angeles courtroom Wednesday, James admitted he defrauded more than 50 people who invested in his real estate-related offerings from late 2003 through August 2006.

James told his victims that he was using their money to invest in real estate, but in fact, he invested in only a few properties and made no profit from real estate investments.

He used funds from new investors to pay what he said were profits to his scheme's early investors.

Prosecutors say James also used investors' money for personal expenses, including his wedding, a recording studio and a production company.

The U.S. Attorney's office says he had losses of about $11 million.

James is set to be sentenced May 24. Prosecutors say he faces up to 20 years in federal prison.