O.C. woman gets prison time for role in Ponzi scheme; ordered to pay $2.5 million to victims
LOS ANGELES — An Orange County woman was sentenced Monday to nearly three years behind bars for her role in a real estate Ponzi scheme that bilked dozens of Southern California investors who collectively suffered millions of dollars in losses.
Angel Bronsgeest, 55, of Lake Forest was also ordered by U.S. District Judge Cormac J. Carney to serve three years under supervised release and pay $2.5 million in restitution to her victims following the 33-month federal prison term. She was allowed to self-surrender on or before June 3 to begin serving her time.
“It’s heartbreaking,” the judge said of the losses suffered by about 60 victims of the fraud scheme. “I can’t imagine having your life savings taken.”
Three Orange County women — who declined to be publicly identified — gave impact statements to Carney, telling the judge in downtown Los Angeles that Bronsgeest pretended to be their “BFF” — best friend forever — in order to solicit funds.
“There was always an excuse when she was asked about what happened to the money,” said one woman, who added that she lost about $100,000 of her retirement savings. “I thought I was fairly sophisticated, but she did this to people who were far more sophisticated than me.”
The scheme was orchestrated by Shawn P. Watkins, 49 — who lived in Utah during the six-year course of the fraud — who promoted himself as a real estate expert with a background in law enforcement.
In trips to Southern California, Watkins conducted monthly seminars in which he and Bronsgeest solicited victims by offering investments in his company, The Equity Growth Group. Victims were told their money would be used to acquire or to repair properties, and some investors were asked to provide “bridge loans” to allow the company to acquire certain properties when money from another investor had not been received, prosecutors said.
In reality, over the course of several years leading up to the collapse of TEGG, the company was not acquiring new properties and had a negative cash flow. Investor money was not used to acquire new properties, nor were investments secured by collateral, and many victims did not receive interest payments, according to court documents.
In fact, money that was paid to some victims as purported interest or a return on their investment came from investments made by other victims, in the fashion of Ponzi schemes. Investor funds also were used to pay salaries and other expenses, including mortgages on three homes Watkins purchased and were being occupied by Watkins, his parents and his estranged wife and children, court documents show.
Bronsgeest’s husband told the judge that the couple had lost $800,000 of their retirement savings in the fraud scheme, suggesting that the defendant – – who previously pleaded guilty to one count of wire fraud — was also a victim.
Carney said Bronsgeest’s cooperation with the government was “instrumental” in Watkins’ guilty plea in Los Angeles federal court to one count of mail fraud. Watkins was sentenced in February to 51 months in federal prison and was also ordered to pay $2.5 million in restitution. When he pleaded guilty, prosecutors said investors had lost about $3.4 million in the scheme.
Assistant U.S. Attorney Gregory Staples told the court that Bronsgeest’s role in the con scheme was to solicit new investors, while Watkins devised and directed the operation.
Asked if she had anything to say prior to sentencing, Bronsgeest apologized to the victims.
“There’s not a day that goes by that I don’t feel remorse,” she said. “I don’t know what happened to me that caused me to do what I did.”
The Register contributed to this story.