A man who allegedly defrauded investors out of $12 million dollars from his onetime base of Malibu was taken into custody by federal authorities Friday, the U.S. Attorney's Office announced.
Peter Jerald Frommer, 34, surrendered to FBI agents Friday morning after a federal grand jury on Thursday indicted him on 17 counts, including mail fraud, wire fraud, money laundering and failing to file federal income tax returns for three years.
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Frommer's alleged jig? He is suspected of convincing investors that he would take their money, buy and flip-for-profit distressed property from companies going out of business, and quickly return the cash plus unusually high interest (as much as 15 percent).
But alas, federal authorities say, the suspect would just pocket the money and use new investments to pay off those who wanted their cash back. Frommer called his company Cap Exchange or Cap X, and he ran the operation from 2004 to 2006, feds say.
"Frommer allegedly misappropriated this money to maintain his lavish personal lifestyle and to make Ponzi payments to victims, while falsifying Cap X account statements to lull victims into believing that their money was safe and earning high returns," stated U.S. Attorney's Office spokesman Thom Mrozek.
More than 50 victims were stung, according to the U.S. Attorney's Office. He faces as many as 233 years behind bars if convicted. Frommer was scheduled to see a judge in Los Angeles Friday afternoon.