San Diego Businesswoman Pleads Guilty To $400 Million Ponzi Scheme
Speaker 1: 00:00 A well known San Diego business woman pleaded guilty yesterday in connection with a $400 million Ponzi scheme. Hundreds of investors were ensnared in the conspiracy over the last several years. According to the plea agreement revealed in federal court union Tribune, reporter Lori Weisberg spoke with KPBS host, Mark Sauer earlier today about the scandal. Here's that interview, Speaker 2: 00:22 Laurie, this is a complicated story. That's ongoing. Give us a thumbnail who is Gina champion Kane and what's the scheme she's pleading to? Speaker 1: 00:31 Well, I think most people who, um, go out to eat would know Jamie champion Kane as, um, a high profile restaurant tour, and probably they're most familiar with her for her, um, patio restaurant chains, but most of those restaurants are gone in the wake of this scandal. So she was thought of as a respected business woman, but that all that all fell apart when she became under, she came under investigation by both the sec, and then later by the FBI and us attorney's office. What she did was she came up with a scheme that had nothing to do with her restaurants, um, where it was a liquor license lending scheme that peep, peep people, the restaurant jurors, or bar owners that needed to get liquor licenses need to put up money to do that. So she came up with a scheme where she solicited investors to invest money for high interest loans, and she would pay them the high interest. Speaker 1: 01:25 And then they would loan this money to the people via Gina champion cannon her companies to these, uh, bar and restaurant owners. And then they, once they, once the liquor licenses were secured, the money would be returned. The problem was, it was all, it was all a scam. She, there were no liquor license loans, no liquor licenses that she was purchasing. Instead she diverted, um, hundreds of millions of dollars to her and her companies. And we later found out through the us attorney's office yesterday, but they were being used to prop up her businesses, pay off credit card debt, uh, box seats at charger and Padres game jewelry from Tiffany's homes, um, expensive cars. Speaker 2: 02:08 So really spending a lot of money on herself and not involved with making the investors whole at all. Right, Speaker 1: 02:15 Right, right. And, and to give it a sense of credibility, um, early on, she would, um, she would pay back investors and, you know, give them back if they wanted their principal or she give them their interest payments. So about 200 million of the 400 million that went in and out, went back to give them the sense of, Oh, this, this really is decent. I'm getting my money back. I'll just roll over my money and put more money in. So that's how she kept it going. But in a classic Ponzi scheme, she's using new money to pay, pay others back. And that went on from 2012 to 2019. Speaker 2: 02:49 Right. And went on for all those years. How did I finally unravel Speaker 1: 02:52 It unraveled when one of the investors, they don't say if he was a, he or she was a victim or not went to the sec and complained about it, the sec launched investigation. And then, and then, um, and the FBI did as well, us attorney's office as well. So it, it, and we don't know who this so-called investor is that that was the tipster, but that's, that's how it got started. Her chief financial officer for a company, uh, pled guilty to the conspiracy yesterday. But there's a big question Mark, on whether, um, there's others complicit, namely Chicago title, Chicago title is a well known title insurance company that, um, she used for holding all these funds and escrow accounts. Uh, we do know from some of the filings and lawsuits against Chicago title, that, um, there were escrow officers who these investors believe were in on the scam. Um, we don't know if, um, we believe that they're those individual escrow officers are under investigation. They no longer work for Chicago title, but the title company, their attorney yesterday says, we don't believe we are a target of this investigation. So this is an ongoing probe. And we'll soon see that there were other people who helped Gina champion King carry this out. Speaker 2: 04:06 And champion Kane is working with prosecutors right now. So, uh, we really don't know what jail time or if any jail time, but she's, she's facing what, 15 years, right? Speaker 1: 04:15 Yeah. It's five years for each of the three charges. And you know, as you've listened to the us attorney yesterday, Robert Brewer, um, give his speech during the press conference, you, you came away with the impression she's gonna get some, get some prison time, even though it could be reduced based on how cooperatives. I mean, he said, one of his quotes was this Ponzi scheme is finally over and she will be punished. Um, and I, you know, you, you have to think that it means more than restitution. Cause I don't know that she has any money for restitution. Speaker 2: 04:47 And what about the investors? You mentioned early on some got paid, uh, years ago in the early years of the scheme, but will they ever be made whole, Speaker 1: 04:56 And that, that is a big question. That's why you seen, um, multiple lawsuits being filed against Chicago title. Um, because they're, they're going after deep pockets and they believe that Chicago title is culpable. So some are hoping that they get money that way. One group of investors, about 43 of them already settled, um, with Chicago title just recently. And they got about 65% of their losses back. Uh, but there's also all of Gina champion Kane's assets are in receivership, multiple bank accounts, real estate. And the receiver is trying to, um, she's been spending a year going through all these assets, trying to see what money could be recovered. There was a lot of debt. So there's not a lot of hope that she's gonna recover a lot right now the assets are at about 15 million. So you can see that that doesn't anywhere near approach. Yeah. Speaker 2: 05:45 As I begin to cover it all has championed Cain said anything to you or anything publicly about her crime? Speaker 1: 05:51 No. From day one I've, you know, I've tried to talk to her or her attorney with no, no success yesterday. She wouldn't, she wouldn't comment when she was in the hearing for sec, uh, case she, she took the fifth. So she's never said a word until this plea agreement where, you know, the wording in that plea agreement, she and her attorneys had to agree to. And one of the really interesting things in that plea agreement is the, the lengths to which she went to conceal what she had done. When she learned there were dual investigations going on Speaker 2: 06:24 Right now, this case comes on the heels of a kickback scam involving the rabbi from Habbat of Poway was wounded in the 2019 attack there in which a gunman killed a congregant and wounded others during a service that also follows by decades, the noted Ponzi scheme by financier J David Dominelli for listeners, who've been around San Diego a while, but this one dwarfs those other scams. Right. Speaker 1: 06:47 Right. So they, the one involving the rabbi that you referred to is about 18 million. Um, there've been various estimates of that. How much has been lost, um, in the, um, J David Case, but about a hundred million. And so I'm thinking with, even with inflation, that it still, um, this still is the biggest of them all. Yeah, yeah, yeah. Yeah. Speaker 2: 07:12 One thing in the water here, a San Diego, right. For this sort of thing. Speaker 1: 07:15 Yeah. I know you would think so. And there's an interesting quote that I just came across that at the time the J David Dominelli scheme came to light that U S attorney at the time said, we may never use the term Ponzi scheme. Again, we just may hear people ask, is this another J David scheme? And early on, when this story broke, people were saying, wow, is this as big as the J David scheme? And it was, it was, I mean, it was Speaker 2: 07:40 Same scam by any name. Well, thanks very much, Laurie. It's quite a story. Speaker 1: 07:44 Thank you. That was KPBS host, Mark Sauer, interviewing reporter Lori Weisberg of the San Diego union Tribune.
