$18 Million Ponzi / Affinity Schemer Gets 12+ Years & $6.8 Million Fine

Published: January 20, 2009

Once in awhile they get caught. Sometimes it seems like not often enough but then one comes out of the woodwork like this. Over 600 investors were taken advantage of! Promised returns of up to 50% in as little as a months time! My sweet Lord, people – does this not strike ANYBODY as being pretty far out there? Don’t these ‘investors’ bear some responsibility just for being unusually, oh I don’t know…STUPID?

And to make matters worse, in addition to a classic Ponzi taking advantage of people facing foreclosure on their home, she added insult to injury by combining it with an affinity fraud targeting a specific ethnic group – in this case African Americans.

NEWS RELEASE                                                        For Immediate Distribution
January 20, 2009
Thomas P. O’Brien                                                    United States Attorney
Central District of California                                       www.usdoj.gov/usao/cac

WOMAN WHO PROMISED TO HELP HOMEOWNERS AVOID
FORECLOSURE SENTENCED TO OVER 12 YEARS IN PRISON FOR
TAKING MILLIONS FROM INVESTORS IN FRAUDULENT SCHEME

The promoter of an $18 million real estate investment scheme that targeted
African-American individuals in Southern California and other states was
sentenced today to 151 months in federal prison.
Jeanetta M. Standefor, a 40-year-old resident of Altadena, California, was
sentenced in Los Angeles federal court by United States District Judge Percy
Anderson. In addition to the prison term, Judge Anderson ordered Standefor to
pay $8,688,924.

Through her Pasadena-based company, Accelerated Funding Group (AFG),
Standefor operated a bogus “foreclosure reinstatement” program that attracted
more than 600 investors between 2005 and 2007. The scheme purported to use
investors’ funds to cure defaults on distressed properties about to be put into
foreclosure. While soliciting investor money and promising returns of up to 50
percent in time periods as short as one month, Standefor and AFG were instead
operating a Ponzi scheme that used money from new investors to pay previous
investors.

Standefor pleaded guilty in September 2008 to two counts of mail fraud.
“Ms. Standefor exploited the housing crisis for her own benefit with false
promises of help for troubled homeowners and fictitious profits for those willing to help,” said United States Attorney Thomas P. O’Brien. “While there are legitimate companies that work with distressed homeowners, investors and mortgage holders must carefully consider any offer of assistance, particularly when there are suspicious promises that seem too good to be true.”
Standefor’s fraud was what is commonly called “affinity fraud,” that is, a fraud directed at a particular community. Standefor and AFG targeted investors in the African-American community through a now-defunct Web site, word of mouth, real estate seminars and testimonials by other seemingly successful African-American investors.

Standefor claimed investor funds would be used to assist owners of
distressed properties. Written materials put out by AFG touted its foreclosure
reinstatement program as “virtually risk-free” and promised investors that their
principal would be safely returned within 72 hours at their request. However,
Standefor and AFG did not use investor funds to cure defaults on any residential
properties, and investors’ requests for return of their investments were ignored.
Standefor used more than $1.9 million of investor funds for personal
expenses, such as her lavish wedding and honeymoon, cars, jewelry, tickets to
entertainment events and home renovations.

This case was investigated by the Federal Bureau of Investigation. In
conjunction with the indictment against Standefor, the U.S. Securities and
Exchange Commission filed a civil action against Standefor and AFG. The SEC
obtained a default against Standefor and AFG on September 18, 2008.
CONTACT: Assistant U.S. Attorney Stephanie Yonekura-McCaffrey
Executive Assistant United States Attorney
(213) 894-1092
Release No. 09-004

If you think this isn’t happening in your community, think again. Foreclosure/shortsale rescue and affinity frauds are becoming increasingly popular in this market. Be aware. Beware.

Realtors… We’re part of the solution, not part of the problem. Make it so.


Last modified: January 20, 2009 at 10:20 pm | Originally published: January 20, 2009 at 10:20 pm
Printed: September 24, 2020