A San Diego-based real estate investor is accused of defrauding dozens of victims out of $300 million through a liquor license loan funding program. NBC 7’s Jackie Crea reports.
Gina Champion-Cain has had a career as a well-respected member of the San Diego business community, winning numerous awards.
The city even declared June 28, 2006 "Gina Champion-Cain Day."
So it was a shock to people that the successful business executive would be accused of defrauding investors out of $300 million.
According to new charges filed this week in a 19-page complaint, Champion-Cain is accused of misleading investors into believing they were taking an opportunity to fund high-interest, short-term loans to people seeking California liquor licenses.
The civil complaint from the Securities and Exchange Commission alleges she told investors that they could make big returns but then used the money for other purposes, possibly to fund her other businesses.
She also accused of forging and fabricating documents.
According to the complaint, Champion-Cain took advantage of the state law requiring applicants to escrow the license purchase price during the applications transfer process.
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Attorney Alex Ozols said her standing in the community may have helped her get the vast sums of money from investors.
"We've seen millions in San Diego. Hundreds of thousands is very common. Hundreds of millions is not very common. I mean, this is someone who is in a very trusted circle, knew people with a lot of money and was able to get it from them," Ozols said.
Federal officials allege Champion-Cain used the money to fund her other businesses that include coffee shops, lifestyle brands, San Diego restaurants like Saska’s and The Patio chain, and rental properties.
Gina Champion-Cain’s real estate company, American National Investments, released a statement Friday saying, in part:
"ANI has been notified of a civil suit brought against the company and anticipate a receiver will be appointed. While we can't discuss details of the ongoing litigation matter, we will continue to cooperate with authorities throughout the process."
Ozols said the goal now is to recover as much of the money as possible by taking over Champion-Cain's companies, which she has agreed to.
He also says the criminal punishment she faces will likely depend on how much money those investors get back.
The SEC has now frozen all of her assets as they try to get that money back. The government has also requested someone take over all of her businesses.
When NBC 7 asked the restaurant manager at The Patio on Goldfinch how the litigation would affect the restaurant, he could not provide comment.
