SANTA ANA, Calif.—A Newport Beach attorney, who boasted of providing loans to wealthy and famous clients, pleaded guilty on July 24 to a fraud scheme that funded a gambling habit and a lavish lifestyle.
Sara Jacqueline King, 39, agreed in June to plead guilty to wire fraud and money laundering in an agreement, federal prosecutors said. Ms. King was scheduled to be sentenced on Jan. 8.
Ms. King was also sued in federal court earlier this year in a claim alleging she defrauded a lender out of about $10.2 million.
Federal prosecutors allege that beginning at the start of 2022 and through Jan. 11 of this year, she collected about $8 million from five investors through her business King Family Lending LLC that was used to “gamble at Las Vegas casinos and support her lavish lifestyle.”
According to her plea agreement, King Lending purported to “provided short-term, high-interest loans to celebrities, professional athletes, and other high-net-worth individuals secured by the borrower’s own assets, including designer handbags, watches, luxury automobiles, yachts, and earnings from guaranteed professional sports contracts.”
Ms. King recruited investors to fund the business loans, claiming that the investments were secured by the same collateral as the loans, prosecutors said. She promised to hold the collateral and if a borrower defaulted she would sell it to pay the investor in full, prosecutors said.
Ms. King said she would keep a percentage of the interest earned from the loans and pass along a percentage to the investor along with the initial investment, prosecutors said.
But she never funded any loan and instead spent the money on herself, prosecutors said.
In the lawsuit, she was accused by British Virgin Island-based LDR International Limited of giving Ms. King 97 loans amounting to $10.2 million from January through October of last year. In one case, the collateral was a vintage Avengers comic book worth $25,000, the plaintiff said in the suit.
The lawsuit alleged that Ms. King “spent the majority of the funds loaned by the plaintiff to Ms. King Lending to gamble in Las Vegas, fund an extravagant lifestyle, and for other personal uses by Ms. King. Plaintiff is informed and believes that Ms. King moved into the Wynn Las Vegas resort and hotel, lived there for six months, and gambled 24/7.”
