San Diego Business Leader
Gina Champion-Cain was a charismatic, well-respected business leader in the San Diego community.
Award-winning and recognized, she founded The Patio Group - which was a business that
operated multiple restaurants across the city of San Diego.
On the outside, she appeared to be an honest and hardworking businesswoman.
But in June 2020, the San Diego business community was in for a big shock.
People discovered that Gina had orchestrated a huge Ponzi scheme for many years!
It was a scheme that successfully scammed investors out at the very least THREE HUNDRED
AND SEVENTY TWO million dollars!
How exactly did Gina go from being admired to disgraced and hated in the San Diego community?
Liquor License
This story of deception and greed starts in 2012.
For some reason, that was the time for Gina to start her life of crime.
She started approaching investors with a pitch.
Her business was supposed to help restaurant owners in the area with high-interest loans
so they could get liquor licenses in California.
At the time, Gina ran a successful firm called American National Investments, or ANI.
She was able to lure investors with the reputation of her firm.
She framed the process of getting liquor licenses as difficult, lengthy and costly for business
owners.
She positioned ANI as the best solution for business owners who were looking to get a
liquor license in order to attract even more customers.
The businesses were pitched as seasoned businesses with established cash flows that could easily
pay the high interest from the loans.
It was practically a guaranteed return.
Gina just didn’t have enough money to loan out.
The promise of big returns attracted the attention of investors of course.
Fabricated
For the prospectus she gave out, Gina prepared a list of businesses looking to acquire the
licenses.
This list of businesses, however, was simply completely made up.
Gina had found businesses that previously had held valid liquor licenses.
So the list comprise of valid businesses that had licenses that were cancelled or expired
through the Alcoholic Beverage Control website.
But none of them needed her help renewing their liquor license.
With her outstanding local reputation, and her being the face of many recognized restaurants
in the area, she didn’t have to overcome many barriers to secure trust from anyone
that was looking to grow their money.
First Investors
Her first investor reportedly invested tens of millions of dollars into her program.
As she recognised the potential of her scam, she recruited employees from her firm to scale
up her operations and further convince more investors of the validity of her program.
A Ponzi scheme only works when investors have trust that they would get returns on their
investment.
Of course, Gina gave the promise of a return on their investment, in order to lure more
and more potential investors.
In some cases, she promised investors returns of 15 to 25 percent per year.
As Gina raised more from investors, she began paying out “profits” to early investors.
These “profits” however, weren’t what they seemed.
Of course, the returns were just paid out with new investors' money.
Personal Use
To keep the scheme’s momentum, Gina paid out around 200 million dollars to early investors,
securing their trust and building word-of-mouth in the business community.
She continued to pay out to investors throughout the scheme.
During this time Gina also began using the money for her own use.
She funneled a proportion of the funds into The Patio Group.
Many of her businesses within the group were simply failing or had negative cash flows.
She used investor money in an attempt to prop up her less successful restaurants and prevent
them going out of business.
Millions of dollars of investor’s money also just went directly into Gina’s pocket!
Gina began to live a life of luxury.
She bought cars, jewelry, and luxury homes.
She began sitting in the best seats at Padres and Chargers games in San Diego.
She was living the high life, all the while her investors were in the dark, believing
that their money was growing.
Deception
As her ponzi scheme kept growing, Gina knew she had to meticulously cover her tracks.
She began getting more and more questions from her investors.
Documents were fabricated and signatures were forged to show how successful her scheme was.
Investors that called about their funds were redirected to a third-party that claimed to
be monitoring Gina’s ponzi scheme.
These accounts were instead secretly managed by her ANI employees who were a part of the
scam, and sometimes Gina herself would run the accounts.
As Gina’s scheme continued to grow larger and larger over the years, one investor grew
especially suspicious and took action.
This investor contacted the Securities and Exchange Commission, better known as the SEC.
This is the government agency responsible for protecting investors and enforcing laws
that prevent market manipulation.
They began a probe into Gina’s activities, along with the FBI.
Knowing that they were in trouble, Gina and her co-conspirators began a big frenzied effort
to obstruct the course of justice and hide their illegal operation
Communication Destruction
So what did Gina do when the SEC asked for documents?
She simply just got rid of it.
Gina immediately changed the email retention policy of American National Investments.
This way, the communications between her and her co-conspirators were destroyed within
24 hours and didn’t leave any trails.
With investigators rapidly closing in, she also began physically destroying evidence
related to the scheme.
She gave out instructions telling her employees that were in on it to shred any incriminating
documents.
Records of her personal transactions were also modified in an attempt to hide her spending
activities.
However, the Ponzi scheme was just too much to cover up.
It was impossible for Gina to make all of her illegal activities disappear into thin
air.
Over the 7 years the scam was running, nearly 500 investors were duped!
Almost 400 million dollars was stolen from them.
Incredibly, in the final weeks of the scheme, Gina attempted to swindle investors out of
even MORE money, somewhere in the neighborhood of $150 million.
Aftermath
In the end, the restaurants previously operated by Gina were taken over by another large restaurant
group.
On July 22nd, 2020, Gina Champion-Cain pleaded guilty for her role in the massive ponzi scheme.
She received three consecutive 5-year sentences for securities fraud, obstruction of justice,
and conspiracy.
For creating a giant ponzi scheme that reached over 400 million dollars, she got a total
of 15 years in prison.
One of Gina’s co-conspirators, Crispin Torres, Chief Financial Officer at ANI, was also sentenced
to four years in prison for his role.
Torres was responsible largely for identifying Gina’s businesses that required a cash boost,
and then funneling investor capital into them.
Supposedly, Gina wanted to write a personal letter to each and every investor to show
how sorry she was.
Her lawyer advised her to not do it.
Here’s what’s next!