Mother and Daughter Accused of Ponzi Scheme

California authorities accused a California mother and daughter of operating a Ponzi scheme that defrauded family and friends out of hundreds of thousands of dollars.  Cristina Madrigal Reyes, 61, and Natalia Guerra Madrigal, 36, both of Salinas, California, were each charged with four felonies alleging they conspired to cheat or defraud, to embezzle, to steal and commit money laundering.  Prosecutors also sought sentencing range enhancements based on the amount of money allegedly stolen.  If convicted of the charges, each faces a maximum of ten years in state prison.  It remains possible that the pair could also face federal charges.

Reyes and Madrigal operated C.N. Broker Services in Salinas, which purported to provide investment opportunities in real estate lending pools.  Authorities allege that from January 2005 to September 2007, investors were promised above-average market returns from loans on real estate that were secured by liens.  According to the complaint, the pair represented themselves as licensed realtors to potential investors, when in fact neither was a licensed realtor.  Instead of making real-estate investments, the pair allegedly made payments to family members, spent money at several casinos, and used new funds to make interest payments to existing investors.  When the scheme began to unravel in August 2007, Madrigal first told investors that her mother had been kidnapped, and then that many of the real estate borrowers had been sent into bankruptcy due to adverse market conditions.

Madrigal and Reyes were each appointed an attorney from the Public Defender's office.  They were released on their own recognizance while their attorneys review documents seized from the operation.