If it sounds too good to be true, someone's going to get arrested.
A Sacramento insurance agent is the latest moneyman to be charged with a multimillion-dollar Ponzi scheme.
William Arthur Sassman II, 41, was taken into custody on Tuesday on more than 100 counts, including 43 counts of grand theft and 40 counts of misrepresentation or omission in the sale of a security. Sassman faces up to 53 years in prison if convicted. He is accused of stealing more than $4 million in total.
The announced arrest of the alleged life-savings “looter” came from state Attorney General Jerry Brown, who happens to be toying with a run for governor.
"William Arthur Sassman solicited millions of dollars from California investors with promises of high returns on business and real estate investments," Brown said. "In reality, Sassman looted their savings to prop up a Ponzi scheme, so he could buy homes and Ferraris."
Not just any sports car, mind you, but Ferraris. (Note to future Ponzi schemers: Load up on Priuses instead. Less conspicuous.)
Over the past decade, according to state documents, Sassman used four companies -- InTex LLC, Formulating Insurance Agency, Formulating Investments, and Systematic Management Services -- to solicit between $10,000 and $500,000 apiece from more than 50 people throughout Northern California and beyond.
Sassman’s first two investment companies, InTex LLC and Formulating Insurance Agency, were ordered by the state to desist and refrain from selling securities in September 2006. Sassman created new companies and continued to market investments.
Sassman is accused of convincing investors, many of whom were senior citizens, to cash out savings from IRAs, annuities, 401(k)s, and the like to “high-return” investments offered by his companies. The investments included real estate, commercial property, and even a laptop stand patented by Sassman himself, among others.
The state said that Sassman made very few of those promised investments and pocketed most of the money to live a lavish lifestyle. He ran up $1.1 million on his American Express card, spent $300,000 on fancy autos, and splashed out $75,000 at Ralph Lauren, not to mention the three houses he owns.
Note to future Ponzi schemers: If you're going to spend $75,000 on clothes, there are better options than Ralph Lauren.
Sassman is accused of paying his early investors with money from newer investors, the classic mark of a Ponzi scheme. In January 2007, the state said a Sacramento couple invested more than $80,000 with one of Sassman’s companies to earn interest on a real-estate deal. Instead, Sassman used the entire investment to pay off previous investors.
In late 2005, Sassman supposedly convinced a Rancho Cordova woman to close a $78,000 life insurance policy and invest the funds with him, promising an 8 percent return. In early 2009, the woman was diagnosed with cancer and her son took over her finances. He contacted Sassman to ask for $7,000 back for medical expenses, but the money never came. When the son asked for the whole investment to be returned, Sassman sent a check for $14,000, but the son said it bounced.
Sassman’s attorney said that he would plead not guilty to the charges.