SANTA ANA, Calif. — A man accused of operating one of the largest Ponzi schemes in U.S. history pleaded guilty Monday to one count each of mail fraud and money laundering in a plea deal with prosecutors.
James Paul Lewis Jr., 59, could face up to 30 years in prison for the scheme, which cost nearly 3,300 investors around $70 million, Assistant U.S. Attorney Greg Staples said.
Prosecutors allege Lewis raised more than $300 million overall. He originally faced 14 counts in the case but agreed to help prosecutors recover more of the investors' assets in exchange for a plea deal, said his attorney, Scott Schlegel.
Authorities said many of the investors scammed by Lewis were fellow members of The Church of Jesus Christ of Latter-day Saints. Lewis, president of Financial Advisory Consultants Inc. in Lake Forest, promised investors annual returns of 18 percent to 40 percent, authorities said.
Lewis told investors he made profits by buying and selling distressed businesses, leasing equipment to medical offices and financing medical insurance premiums, authorities said.
He has been held without bail since January 2004 when he was arrested in Houston following a nationwide manhunt.
Staples said Monday that Lewis used investors' money to trade in currency futures — where he lost $22 million — and to buy homes in Villa Park, San Diego, Laguna Niguel, Palm Desert and Greenwich, Conn. He also bought luxury cars and jewelry for himself, his girlfriend and family members, Staples said.
Lewis, who appeared at the hearing in a khaki jumpsuit and wrist shackles, told U.S. District Judge Cormac Carney that he did not dispute any of the charges.
In a phone interview after the hearing, Schlegel disputed Staples' characterization of the amount of unrecovered losses. He said a jury should determine the amount investors lost — a figure that could impact Lewis' sentence.
He said investigators have seized some of Lewis' assets, reducing the total amount of loss cited by Staples.
"The loss isn't anywhere near $70 million out of pocket," he said. "There's a lot of documentation and accounting that needs to be done."
A sentencing hearing is set for Jan. 23, Schlegel said. He added that the Securities and Exchange Commission is pursuing a separate civil case against Lewis.