By Cathy Locke
A federal grand jury has returned indictments in two separate real estate Ponzi schemes, resulting in the arrest of two Sacramento-area men.
The indictments were returned April 14, but were sealed until the defendants were arrested.
Royce Newcomb, 49, of Granite Bay was arrested Friday on charges of wire fraud in an investment fraud scheme and is to be arraigned Monday.
According to the five-count indictment, from January 2009 to February 2010, Newcomb and another individual operated an investment scheme that solicited people to invest in purported purchases of real estate. He promised the investors that he would take care of purchasing the property for them in exchange for a small fee or percentage of the purchase price.
To make the investment opportunity appear more legitimate, Newcomb told investors that he was using an escrow account at Contour Escrow Services Inc. In fact, officials said, Contour was run by a co-schemer who did not have a license to perform escrow services.
The indictment alleges that Newcomb took in hundreds of thousands of dollars from investors, but instead of purchasing real estate, he used the investors' money to pay for purported returns to earlier investors as part of a Ponzi scheme, thus misleading his victims into believing that their investments were profitable. Newcomb also allegedly used a significant amount of the victims' money for his personal benefit.
In a similar but unrelated case, Garry Bradford, 62, of Sacramento was arrested Tuesday after a federal grand jury returned a five-count indictment charging him with wire fraud in connection with a real estate investment Ponzi scheme.
According to the indictment, from August 2004 until October 2008, Bradford ran an investment club, Millenium Capital Group Inc. He told investors that he would invest their money in real estate on their behalf, but instead he allegedly used their money to pay purported returns to earlier investors and for his own personal benefit.
Bradford allegedly told investors that the Millennium Capital Group was making sufficient profits in real estate to pay an 18 percent return.
This indictment alleges that the Millennium Capital Group received approximately $2.2 million in deposits from about 21 individual and at least one title company. Only about $700,000 was actually invested in real estate.
Bradford pleaded not guilty at his arraignment Wednesday before U.S. Magistrate Judge Kendall Newman. He was released from custody on a $50,000 bond and is to appear before U.S. District Judge Kimberly J. Mueller on May 19.