Who knew what? Champion-Cain Addresses Liquor Licensing Ponzi Scheme In Jail Video

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Former San Diego restaurateur Gina Champion-Cain, speaking under oath from prison, said she hid from everyone but her own employees that she was operating a bogus loan system. liquor license. This included Chicago Title, which has been sued by hundreds of victims who claim the escrow company was complicit in orchestrating the $400 million fraud.

Lawyers for the company, who victims of the Ponzi scheme say gave credibility to the long-running fraud, say Champion-Cain’s sworn testimony last week bolsters their claim that Chicago Title doesn’t was not responsible for the losses of the investors. Responses, however, obtained from opposing counsel representing two primary victims of fraud – Ovation Finance Holdings and Banc of California – acknowledge that Chicago Title employees knew Champion-Cain was using fake corporate emails and that she had also invented a fake escrow company employee to sign documents as part of her loan operation.

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Champion-Cain’s testimony during a six-hour deposition last Tuesday marks the first time Champion-Cain has testified since she was sentenced nearly a year ago to 15 years in prison for fraud and conspiracy in related to the Ponzi scheme. Dressed in blue prison gear and seated in a room at the Dublin Correctional Institute where she is incarcerated, she remained largely calm and unfazed as she answered hours of questioning.

At one point, more than three hours into the deposition, Chicago Tittle attorney Steven Goldfarb sought to establish the veracity of Champion-Cain’s statements, calling her “an incredibly successful liar for eight years.” and suggesting that some of his answers could have been made. as part of an effort to get his sentence reduced.

She quickly pushed back, insisting her motivation was nothing more than being honest.

“I have no reason to lie. I’m already incarcerated,” she said, her face betraying little emotion. “You can keep skewing me all you want; it’s not going to affect me anyway. I’m already in jail I’m already punished I’m already remorseful I’m already atoning for my sins and I’m telling you God’s honest truth You don’t like what you hear once in a while, but that’s what I do.

VIDEO | 03:15

Gina Champion-Cain questioned in prison to find out if others were complicit in a $400 million Ponzi scheme

The six-hour deposition last week marks the first time the former San Diego restaurateur has testified since she was sentenced nearly a year ago to 15 years in prison for defrauding hundreds of investors. (Video courtesy of Cooley LLP)

The deposition, obtained by the Union-Tribune, comes just as mediation talks are underway this week in a bid to settle nearly a dozen lawsuits against Chicago Title, claiming he was partly responsible for the investor losses estimated at over $180 million.

To date, individual settlements between Chicago Title and some 200 victims have been approved, with the investors recovering approximately $65 million of their claimed losses of $90 million.

“Plaintiffs’ allegations that Chicago Title employees were co-conspirators and knew the participants in the fraud are unfounded and contradicted by Ms. Cain’s testimony,” said Chicago attorney Steven Strauss, of Cooley LLP, about last week’s deposition. “As Ms. Cain testified, she always tried to give Chicago Title the impression that she was running a legitimate business and went out of her way to hide from Chicago Title employees that she was defrauding investors.”

The Banc of California, which lost about $35 million in principal it loaned out for what it believed to be a legitimate liquor license lending program, released a statement Monday saying Champion- Cain suggests otherwise.

“Any suggestion that Chicago Title was unaware of the fraud is nonsense,” the bank said. “Gina Champion-Cain’s sworn testimony confirmed that Chicago Title agents knew about the fraud at least as early as 2017. The evidence is compelling that several current and former Chicago Title agents took bribes as part of this Ponzi scheme, provided fake certifications to auditors. , led investors to believe the funds were being held in escrow accounts when this was false, and knowingly allowed Ms. Cain to falsify escrow documents.

At issue in the deposition is what Chicago Title and some of its key employees did or did not know during the Ponzi scheme, which began in 2011 and ended eight years later when the Securities and Exchange Commission charged Securities Fraud Champion-Cain. . Known for her portfolio of now-closed Patio restaurants, Champion-Cain later pleaded guilty in a parallel criminal case to fraudulently enticing investors who believed they were making high-interest loans to incompetent license applicants. to prepay a required sum of money while their claims were pending before the state Department of Liquor Control.

The bulk of the funds she received from these investors were instead channeled to companies she controlled – American National Investments and its subsidiary ANI Development – not only to support Champion-Cain’s business ventures, but also to repay previous loan program participants. Chicago Title was the escrow company that Champion-Cain used to hold investors’ money.

“The fact that the liquor license buyers and the liquor license loans were fictitious was a fact known only to you and certain other people at ANI; Is that correct?” asked Goldfarb of Hahn Loeser & Parks.

“Correct,” replied Champion-Cain.

“And you never told anyone at Chicago Title that the liquor license loan business was a fraud?” Correct?” Goldfarb continued.

“Correct,” replied Champion-Cain.

Pressed at one point by Goldfarb on the extent of what Chicago Title knew, Champion-Cain was less certain.

“Isn’t it true that at no time did anyone at Chicago Title know that you were running a fraudulent liquor license lending business?” He asked.

Champion-Cain replied, “I don’t know what they knew or didn’t know.”

Last week’s deposition is one of three court-approved dates for formal testimony to be taken in the ongoing civil litigation. Another will take place next month and a third in March.

Testimony earlier today in response to questions from the attorney representing Ovation and Banc of California documented instances in which Chicago Title employees knew, according to Champion-Cain, that it was using fake email addresses from Chicago Title to communicate with investors. While the use of such emails is not a new revelation in the fraud case, Champion-Cain’s confirmation that escrow agents were aware of such tactics could potentially bolster victims’ lawsuits against Chicago Title.

In a series of questions about the fabricated emails, attorney Alex Pilmer, representing the two financial firms suing Chicago Title, asks Champion-Cain, “Have you ever had conversations with (the former Chicago Title employee ) Ms. Reynolds about you using a fake email address for her? »

“Yes, I had discussed this with Della and Joanne (former trustees) on several occasions,” Champion-Cain replied.

Pilmer then asked Champion-Cain if anyone at the company objected to her using a fake email, and she said no.

During the deposition, Pilmer referred to an incident in 2017 that almost turned out to be the loss of Champion-Cain’s liquor license loan program. A Torrey Pines Bank representative inquired about wiring instructions for a $5 million line of credit for real estate developer Kim Peterson, who had invested in the loan program and also recruited other investors to Champion-Cain.

The bank representative was asking about an escrow agent whose name – Wendy Reynolds – appeared on a number of escrow agreements. The problem, Champion-Cain said, was that there was no such employee. It had been made.

“Della (DuCharme) immediately texted me and said, you gotta call me. Who is Wendy Reynolds, or is it Wendy Reynolds or something,” Champion-recalled Cain.” And I knew right away there were issues because I had signed these escrow agreements as Wendy Reynolds which, of course, we all know she was never employed at Chicago Title.”

Champion-Cain said the escrow agreements that were signed by a non-existent Wendy Reynolds were eventually re-signed by DuCharme. But Champion-Cain remained unnerved by the prospect that her scheme could have unraveled quickly.

She testified that she was “trying to fix everything and make sure this whole program didn’t blow up because of this stupid decision on my part, which was signing the name of someone who didn’t exist in Chicago Title “.

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