Lisa Mahoney to pay more than $2.9 million to scam victims

January 28, 2011 @ 6:05 pm

By Gina Germani | ivnews.INFO

Restitution of more than $2.9 million will be paid by El Centro native Lisa Garcia Mahoney to more than 50 victims of a real estate investment scam for which Mahoney will begin a four-year prison sentence on April 1.

U.S. District Judge Christina Snyder earlier this month issued an amended judgment of Mahoney’s Oct. 15, 2010 sentencing that allows Mahoney to repay her victims only $2.9 million instead of the $5 million that federal prosecutors had sought.  The judge also extended the date Mahoney is required to begin her sentence from Feb. 1 to April 1.

Mahoney, 50, pleaded guilty in 2009 to a federal wire fraud charge in a Ponzi scheme she ran from 2005 to 2008.  Mahoney admitted to defrauding more than 50 “investors” in non-existent real estate developments in Texas, and in Bakersfield and Temecula.

Mahoney lured investors with “highly lucrative,” “legitimate,” investments that promised returns ranging from 24 percent to 100 percent, sometimes in fewer than six months.

In a Ponzi fraud, investors are offered abnormally high, short-term returns on non-existent or unregistered securities.  Operators of the scheme pay back early investors their initial monies as well as the promised earnings in the time promised, often generating additional investments by eager investors.  But the money used to pay those loans comes from other investors’ payments.  Eventually, the scheme collapses as the more recent investors fail to get their money back.

Details of Mahoney’s restitution agreement are sealed by the court at Mahoney’s request.  But in earlier court documents she initially admitted to stealing more than $2.5 million and then she later claimed she had scammed less than that because the monies she took were “loans” made by investors.

The wire fraud charge to which Mahoney pleaded guilty stems from a $225,000 transaction between Mahoney and New Jersey resident, Anamarie Battistessa, who flew to Southern California to meet with Mahoney about the real estate development, according to a civil lawsuit filed against Mahoney in Los Angeles Superior Court, and which has since been judged in default against Mahoney.

Battistessa, who could not be reached for comment for this story, gave Mahoney $60,000 during their 2007 meeting in California, according to court records. At Mahoney’s direction, Battistessa later wired an additional $225,000 to Mahoney from a New Jersey bank account.  About eight months later, Mahoney was refusing to answer Battistessa’s questions about where her investment money was and why she was not being repaid her investment and the promised returns.

Mahoney, a 1979 graduate of Central Union High School in El Centro, who played the clarinet in Central’s marching band, and was voted by her senior classmates as the “rowdiest” in her class, faces three years parole following her four-year prison term and is banned from engaging in loan programs, telemarketing services, investment programs, or any other business that requires solicitation of money.