Thursday, October 7, 2010
Local radio host and real estate broker Barbra Alexander was arrested this morning and brought to federal court in San Jose to face fraud charges. A federal grand jury indicted Alexander and her business partners, Michael Swanson of Seaside and Beth Pina of Idaho, on Oct. 6 with mail fraud, wire fraud, securities fraud, money laundering, and conspiracy to commit mail and wire fraud. The Security and Exchange Commission also filed charges against the three for misappropriating $2.5 million they received in allegedly fraudulent sales.
The three partners ran Monterey-based APS Funding, Inc, an investment company that offered businesses and real estate ventures short-term, high interest loans. The indictment alleges that the partners recruited investors to put more than $7 million into the loans, but instead used most of that money for their own personal expenses.
SEC prosecutors allege that Alexander used her status as the host of a business focused radio show, MoneyDots, to lure investors into the scheme. MoneyDots airs on KION and is internationally syndicated.
"For the second half of 2008 and all of 2009, while the three partners paid themselves at least $30,000 a month, APS Funding failed to make any legitimate loans," reads the SEC complaint. "Instead Alexander used investor funds to pay for her other businesses, home renovation, and for her radio show, MoneyDots."
Prosecutors allege that APS Funding was running a classic Ponzi scheme, whereby money from new investors was used to pay old investors.
Alexander spent one night in jail and was released on Friday Oct. 8 on a $50,000 bond. According to the MoneyDots website, she is slated to broadcast her next live radio show on Saturday morning. Her next court appearance is Oct. 21.
The Federal Bureau of Investigation, Securities and Exchange Commission, and the Monterey District Attorney’s Office investigated the case with collaboration from President Barack Obama's Financial Fraud Enforcement Task Force.
Editor's note: This article was corrected to reflect that Alexander was released on bond on Oct. 8, not on Oct. 7.