JAMES KOENIG IS FOUND GUILTY OF $250 MILLION PONZI SCHEME THAT CREATED SUN GROVE RESORT VILLAGE'S PROBLEMS

California Man Guilty in $250 Million 
Ponzi Scheme

ponzi tracker - JORDAN D. MAGLICH - MONDAY, MAY 13, 2013 AT 9:15 PM

A federal jury has returned a guilty verdict against a California man for masterminding a massive Ponzi scheme that bilked investors out of over $250 million.  James Stanley Koenig, 60, was found guilty of all but one of the three dozen criminal charges levied against him by prosecutors.  Koenig will remain in custody until his June 11, 2013 sentencing, and could receive a sentence of up to 50 years in prison.

Koenig ran Asset & Real Estate Investment Company ("AREI") along with fifty affiliated companies, telling potential investors that it specialized in senior housing centers.  Beginning in 1997, AREI controlled more than twenty senior housing and residential assisted-living centers, representing that they were suitable as a secure and profitable vehicle for tax-sheltered property exchanges.  After purchasing an assisted living facility, Koenig would then sell ownership shares in the property to investors.  Eventually, more than 1,000 victims would invest hundreds of millions of dollars with Koenig.

However, while Koenig represented that investor funds and facility revenues were reinvested back into the facilities, this was not the case.  Instead, Koenig used investor funds to pay returns to existing investors, as well as finance a luxury lifestyle enjoyed by himself and two co-conspirators.  This lifestyle included an 80-acre castle estate, a Lear jet, luxury homes and fancy cars.  

While investigators charged that AREI was insolvent no later than May 2007, Koenig continued to bring in new investors based on promises of false profitability.  After an investigation, criminal authorities arrested Koenig in 2009 and charged him with 77 criminal charges - 40 counts of securities fraud and 37 counts of residential burglary that were predicated on Koenig's entry into investor homes to induce them to invest in his scheme.  Investor losses were estimated at over $200 million.

According to authorities, Koenig failed to disclose to investors that he had a previous 1986 conviction stemming from his role in a gold-selling scam.  He served two years in federal prison and was ordered to pay over $5 million in restitution to defrauded investors. 

Reader Comments (1)

The Investors are getting some Justice but the seniors that lived in the senior living facilities that Koenig and crew destroyed are not getting Justice. Over a dozen of the senior living facilities closed after they were financially raped. The remaining senior living facilities went to the investors and they attempted to recover their bad investments. The investors/owners desperately attempted to keep the senior living properties in operation by doing many questionable and illegal activities.

We lived in one such property in Peoria, Arizona called Sun Grove Resort Village (SGRV). The 20 owners allowed the 2005 Medicare Fraud Felon Scott Green to operate SGRV by using False Advertising, Baseless Lawsuits, Withholding Essential Services, and Elder Abuse/Fraud. We have reported the SGRV crimes on our Facebook "Mark Fairall" and now we are gathering information on the other AREI/OAKDALE HEIGHTS properties that were managed by Seniority, Inc. and The American Baptist Homes of the West (ABHOW). We have asked Congress and President Obama to have a SYSTEMIC INVESTIGATION done. The focus of the investigation is to verify the dangerous living conditions of the senior living facilities, to stop the usage of false and misleading advertising of the senior living facilities, and to verify and stop the usage of felons to manage and work in the senior living facilities.

James S. Koenig was a thief but the Investors/Owners were and are elder abusers, senior financial exploitation criminals, and murders. We saw 58 senior abuse cases and 33 of those seniors have died. That includes the death of my 94-year old aunt, Catherine Reinertson, and the impending death of my wife Carol. SGRV's felon Scott Green refused to fix the mold in our SGRV apartment in retaliation to our filing formal complaints with the authorities. He even attempted to murder her by stopping the delivery of her anti-rejection medication. Carol will soon die because she is now being hospitalized because her rejection blood work shows it is fourteen times higher than normal. Our three dogs passed away due to liver cancer caused by the toxic mold at SGRV.

The SGRV management company Seniority Inc. was so impressed with Scott Green's performance that he was named Executive Director of the year in 2009-2010. The felon Scott Green was fired on 08/28/12 because the SGRV caught him embezzling funds from SGRV. Since Arizona Law Enforcement does nothing this has been reported to the FBI, IC3, Department of Justice, Senators Jeff Flake and John McCain, the US Senate Special Committee on Aging, and President Barack Obama.

May 14, 2013 | Mark Fairall

INFORMATION FROM THE SUN GROVE RESORT VILLAGE ELDER ABUSE STORY

  CHAPTER ONE –THE PONZI SCHEME

AREI/OAKDALE HEIGHTS PONZI

This is the complete Sun Grove Resort Village (SGRV) true story that we posted on our Facebook and the Internet in April, 2013. Please read the first article which is how the AREI/Oakdale Heights Ponzi Scam started. The AREI/Oakdale Height’s James Koenig is presently on Trial in California, and it is state's largest Ponzi Scam (2,000 investors lost $250 million). This is the SGRV Elder Abuse and Financial Exploitation story that happened to us. This is being presented to the U.S. Congress.

THE SUN GROVE RESORT VILLAGE PONZI SCAM

JAMES KOENIG
PONZI FELON

 

California’s largest PONZI SCAM, AREI/OAKDALE HEIGHTS, went to trial on 02/06/13. The mastermind, James Koenig (picture 1), is charged with 42 counts of criminal fraud. James Koenig refused the plea-agreement and elected to go to trial.  This Ponzi scam defrauded 2,000 investors of $250 million. They were promised huge returns, tax-dodging benefits, and a “No-Risk” real-estate-secured guaranty with 23 senior living facilities. The other investment brokers involved in this Ponzi scam cut deals. Jeffery Guidi (picture 2) pled guilty, became a witness for the state, and paid  nearly $300,000 back to investors. Gary Armitage (picture 3) took a plea agreement for ten years in jail which avoided the trial and a possible longer prison sentence. James Koenig’s Trial is scheduled to last three months until April, 2013. James Koenig never disclosed to his investors that he had spent 2 ½ years in prison for his 1980’s gold scam

.

JEFFERY GUIDI
PONZI FELON[

ASSET & REAL ESTATE INVESTMENT (AREI) bought the 23 senior living facilities and OAKDALE HEIGHTS was the management company that managed most of the properties. Sun Grove Resort Village (SGRV) is one of the 23 senior living properties involved in the AREI/OAKDALE HEIGHTS Ponzi trial. James Koenig owned Oakdale Heights Management Company which ran many of the senior living facilities, including SGRV. James Koenig drained all the properties’ operating capital and ran the properties into the ground.  The 20 SGRV owners bought the property for $4.1 million in 2006 as tenants-in-common. They were promised a 1031 Tax Shelter, an 8% to 12% annual return, and doubling their investment when the property was sold in the future. The Ponzi Scam started to collapse in 2007 and the investors received the SGRV deeded ownership in May, 2008. They asked for and received my assistance in getting my former employer, Bank of America, to rewrite SGRV’s four-month past due loan which saved SGRV from foreclosure.

 The SGRV owners decided to keep Scott Green as the Executive Director without doing any background

GARY ARMITAGE
PONZI FELON

checks on him. The SGRV owners hired Seniority, Inc., to manage their senior living facility.  Seniority, Inc. hired Scott Green to be their employee and to manage SGRV. Seniority, Inc., a subsidiary of American Baptist Homes of the West (ABHOW), failed to do any background checks that would have discovered Green’s criminal record of defrauding seniors since 1999. Scott Green abused and defrauded seniors at SGRV for nearly eight years.

Some of the SGRV Investor/Owners that lost money were: George Grandemanche, a 66-year old retired school principal who lost $150,000; Linda Jones who lost over $250,000; and Kathy Adams a 66-year old beauty salon owner who lost $600,000.The 20 SGRV Investors lost all their money since the property had no equity and was in terrible condition. The SGRV owners operated SGRV on a shoestring which allowed the property to deteriorate to being dangerous. They allowed Scott Green to break the law in obtaining new residents, hiring illegal alien workers, and raising capital in order to keep the senior living facility in operation until it could be sold. The SGRV Investor/Owners that became involved in SGRV’s daily operations are: George Grandemange, Kathryn Martin, Leonard Matiniak, George and Jeanne Emmett, and Melchoir Lumetta.

The SGRV Owners’ lack of ethics and their desperation to recoup their losses gave Scott Green the opportunity to continue to defraud and abuse seniors at SGRV. Scott Green was convicted in 2005 for Medicare Fraud. Scott Green was terminated from SGRV on 08/28/12. The SGRV Owners are presently investigating Scott Green for embezzlement. The SGRV Owners replaced Scott Green with his assistant Karl Nunley who continues all the illegal activities at SGRV.

The 28-year old, 86-unit, 86,541 square foot SGRV senior living facility has been listed for sale several times by US Preferred Realty for $4,574,734.00. This property never should be sold because it is a hazard to the Public. 

The SGRV property should be destroyed because of the dangerous conditions

of the property and because the property is full of toxic mold.

LIST OF SGRV INVESTOR/OWNERS

Verified in Public Documents

1.   Kathleen A. Adams - Healdsburg, CA

2.   Thaddeus J. Drzazgowski - Deceased 07/14/11

3.   Marilyn J. Drzazgowski - Jericho, New York

4.   George Emmett – Manager

5.   Jeanne Emmett – Manager -Pleasanton, CA

6.   George Grandemange- *Manager -Marlin, CA

7.   James S. Hawton – Napa, CA

8.   Beverly A Hawton - Napa, CA

9.   Carole Hebertson - Sun City, AZ

10. Wally Hebertson - Deceased 04/28/12

11. Charles Edward Johnson - Contra Costa, CA

12.  Linda Jones - Fremont, CA

13.  Melchoir J. Lumetta – Manager - Bend, OR

14.  William Martin – Concord, CA

15.  Kathryn Martin – Manager - Concord, CA

16.  Leonard J. Chris Martiniak – Manager

17.  Sarah M. Martiniak - Berkeley, CA

18.  Michael McClenahan- San Mateo, CA

19.  Alfred D. Nannini - Windsor, CA

20.  Frances E. Pearson - Marlin,

* Primary Investor/Owners

Managing Member George Grandemange