Recently in Orange County, California, Brett Barber from Costa Mesa was sentenced to over 15 years in prison for his involvement in a real estate investment scam. The scheme, which defrauded over $17 million from hundreds of investors, including many retirees, was described by US prosecutor Martin Estrada as a fraudulent investment plan that exploited victims’ retirement funds.
The judge involved, Otis D. Wright II, emphasized the severity of the case, stating that while no violence occurred, it was a form of violence where the defendant knowingly took advantage of elderly investors, depriving them of their savings and security.
Barber, 42 years old, was a co-owner of BNZ Capital One LLC and National American Capital, both investment companies based in Newport Beach. From May 2019 to October 2021, Barber played a role in two investment fraud schemes.
In the first scheme, BNZ Capital’s leaders, along with several marketers, raised funds through false statements regarding real estate projects and resale of properties. Barber, along with his co-conspirator Louis Zimmerle and marketers, made false promises to investors of an 8% to 10% return on investment and potential bonuses post-transaction. They assured investors that their funds were secure with Federal Deposit Insurance Corporation (FDIC) coverage.
Despite purchasing some real estate, BNZ Capital did not engage in any substantial development or reselling to generate profits. Instead, investor funds were misappropriated to pay fees for Barber, Zimmerle, and others, including buying homes for Barber and Zimmerle and repaying early investors.
Through this scheme, Barber, Zimmerle, and marketers coerced or persuaded investors into transferring around $13.8 million to BNZ Capital, leading to an estimated minimum loss of $7 million. Barber personally received and retained nearly $3 million. At least five investors were identified as vulnerable elderly individuals who suffered significant financial difficulties due to the investment fraud.
Upon learning of federal scrutiny, Barber initiated a second fraud scheme through National American Capital (NAC) in January 2021, operating similarly to the previous company. Deceiving investors with false promises of funding real estate developments, Barber and marketers misled investors into believing in non-existent projects.
During a meeting with an undercover enforcement officer in October 2021, where Barber continued to lie about NAC’s background and operations, the scheme resulted in a minimum loss of $3.5 million, with Barber personally withholding nearly $390,000.
Throughout both fraudulent schemes, Barber failed to disclose his prior ban by the Financial Industry Regulatory Authority (FINRA) as a broker or associate broker to investors.
Barber was indicted by a federal grand jury the same month but was later released on bail. In January 2023, after violating pre-trial release terms, he was ordered to surrender to US Marshals by January 13. He failed to do so. In March of the same year, Barber was arrested in Santa Cruz County, California, later transferred to federal prison in Los Angeles.
Zimmerle, a co-defendant, pled guilty to telecommunication fraud in January 2022. On June 3 of the same year, Judge Wright sentenced Zimmerle to five years in prison, with probation, a $10,000 fine, and ordered him to pay over $680,000 in restitution.
Furthermore, the Securities and Exchange Commission (SEC) filed a civil lawsuit in October 2021 against Barber, Zimmerle, and BNZ Capital regarding compensation issues related to the case, alleging fraudulent collections of over $13 million from numerous retail investors. This lawsuit is ongoing.
Judge Wright II has scheduled a property compensation hearing for January 9 next year.