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Ponzi scheme operator gets 5 years

Victims lived in Costa Mesa, other O.C. cities.

November 03, 2010|By Joseph Serna, joseph.serna@latimes.com

NEWPORT BEACH — A Tustin businessman was sentenced to five years and four months in prison Wednesday for operating a Ponzi scheme that drained a dozen Orange County residents — some of them from Costa Mesa — out of hundreds of thousands of dollars in savings.

Paul Abad, 46, pleaded guilty to 25 felonies as part of a plea agreement with prosecutors at the Harbor Justice Center in Newport Beach.

As owner of Thirteen Thirty-Two Inc., Abad swindled people out of more than $760,000 by convincing them that they were investing in futures and commodities.

"He's a thief, he committed securities fraud," said Deputy Dist. Atty. Doug Brannan. "He lured himself into the confidence of several victims … he did a serious amount of damage to people's savings."

Abad started his scam in 2001 and kept it going by mailing out fake financial statements showing investors were making money. In some cases, he even mailed out payments to investors with other investors' money.

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He spent the money on himself, authorities said.

When some of the victims asked for their money back, Abad told them he'd forgot the password to his computer and couldn't access their funds.

The U.S. Commodities Futures Trading Commission sued him and the government froze his assets in 2008.

Abad's family has paid back about $150,000 of what he stole. He's been ordered to pay back an additional $150,000 in restitution.

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