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California Police Make Arrests In Alleged Ponzi Scheme

May 17, 2006

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Police in southern California have arrested two men, charging them with running a phony investment scheme that raked in over $68 million.

Calling it a classic "Ponzi Scheme," authorities say the pair duped investors into believing they were putting money in pools of life insurance policies.

In fact, say police, Robert Alvin Coberly Jr. and Curtis Devin Somoza put most of the money into their own pockets. They allegedly lived well on the enterprise, buying houses, a $400,000 wristwatch and a $300,000 boat.

In that alleged scam, the pair reportedly sold about $6.7 million worth of "prime bank" note investments to about 50 investors all over the country.

They allegedly used $3.1 million of that to pay returns to existing investors, helping to perpetuate the scheme.

Investors caught up in the scheme said they believed their money was going into insurance pools that would yield a five to one return with no risk. Police say there is really no such thing.

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