California Man Guilty In $62 Million Ponzi Scheme; Milton Retana Targeted Latinos, Ordered Evidence To Be Hidden In Back Of Religious Bookstore

In yet another case in which the name of a precious metal or mineral was used in a Ponzi scheme, Milton Retana has been found guilty of six counts of mail fraud and one count of lying to federal investigators.

Evidence of the fraud was hidden in the back of a religious bookstore operated by Retana’s wife, prosecutors said. When investigators searched the bookstore, they found millions of dollars in cash, prosecutors said.

Retana, 46, of Huntington Park, Calif., faces a maximum of up to 125 years in prison. Sentencing is set for April 26. Investigators said he operated Best Diamond Funding, a Ponzi, affinity-fraud and real-estate investment scheme that fleeced more than 2,000 victims out of more than $62 million.

Best Diamond was located next door to the bookstore. The FBI and U.S. Postal Inspection Service smashed the scheme, prosecutors said.

Jurors returned the verdict in less than an hour, after a week-long trial. Dozens of victims appeared in court to hear the verdict, prosecutors said.

Beginning in 2006, Retana told investors their money would be used to buy and sell real estate. He targeted mostly a Spanish-speaking audience, and used religion in his pitches, prosecutors said.

“Retana guaranteed returns as high as 84 percent each year, claiming that he would purchase properties in bulk at below-market prices and immediately sell them for a profit,” prosecutors said.

But records showed Retana “used only a tiny fraction of the victims’ money to purchase real estate and that his company was actually losing money,” prosecutors said.

As often is the case in investment schemes, victims “mortgaged their homes and drained their retirement accounts because they believed Retana’s promises that their investments would be safe,” prosecutors said.

Among the victims were a stone mason, a truck driver and a roofer. The roofer also was the pastor of his church.

The scheme nearly was detected in 2008, when the California Department of Real Estate audited Best Diamond, prosecutors said.

Retana, though, stymied the probe “by ordering his employees to hide all of the investor files at the back of his wife’s religious bookstore, La Libreria Del Exito Mundial.

“His scheme was disrupted in October 2008, when federal agents from the United States Postal Inspection Service and the Federal Bureau of Investigation executed search warrants on the offices of Best Diamond Funding and the bookstore,” prosecutors said.

Agents found $800,000 in cash stashed in Retana’s desk and $3.2 million in cash hidden in the back of the bookstore. Investigators seized another $8 million from Retana’s bank accounts.

“Soon after the execution of the federal search warrants, agents interviewed Retana, who lied about how much money he had received from the investors and claimed that he could pay all of them back,” prosecutors said. “Retana was later secretly recorded telling a Best Diamond employee not to tell the government how much money Best Diamond had received from the investors.”