Brett Barber, 45, a former co-owner of the Newport Beach-based BNZ Capital One LFC and National American Capital, was sentenced by U.S. District Judge Otis Wright on Monday. Barber also faces a Jan. 9 restitution hearing in the case.
The defendant pleaded guilty in October 2023 to two counts of wire fraud and one count of criminal contempt for his role in the scheme.
Federal prosecutors say Barber raised more than $17 million by promising more than 100 investors—many of whom were elderly—returns of up to 10 percent in real estate “house flipping” deals that turned out to be fraudulent.
“There may not have been bloodshed, but this was real violence,” Wright said during the sentencing hearing. “[The defendant] knew these people were in their golden years, and he just took it all.”
Prosecutors claim that from May 2019 to October 2021, Barber participated in two schemes to defraud victims out of their money and property.
In the first scheme, BNZ Capital, its principals, and several marketers raised money by telling investors their firm “flipped” homes, meaning they bought properties and fixed them up to sell at a profit, according to federal officials.
Barber’s co-conspirator, Louis Zimmerle, 65, of Sacramento, and the marketers allegedly promised investors a “guaranteed” return of 8 percent to 10 percent, according to federal officials.
Barber allegedly told investors that their funds were safe and federally insured.
BNZ Capital did buy some real estate, but the company did not take any steps to develop the parcels and didn’t flip any of them for profit, according to prosecutors.
The company instead allegedly used investor funds to pay Barber, Zimmerle, and others associated with the scheme, including buying homes for Barber and Zimmerle.
Some of the money was used to pay earlier investors, according to the U.S. Attorney’s Office.
Federal officials claim Barber received and kept more than $2.9 million of the investor funds for his own personal gain. At least five investors were elderly people who suffered substantial hardship because of the fraud, the U.S. Attorney’s Office claimed.
“This defendant enriched himself through a fraudulent investment scheme that solicited millions of dollars from retirement funds belonging to his victims, including older adults,” U.S. Attorney Martin Estrada in Los Angeles said in a statement Monday.
Barber, Zimmerle, and the marketers solicited or funneled about $13.8 million to BNZ Capital from investors, according to Estrada’s office.
Investigators estimate that actual losses reached about $7 million from the scheme.
After Barber discovered federal officials were investigating BNZ Capital, he started a second fraudulent scheme involving a company he formed in January 2021 called National American Capital (NAC), prosecutors claimed.
The NAC scheme operated basically the same way as the first scheme. Barber allegedly worked with marketers to lie to investors by saying their money would be used to fund real estate development projects, according to federal officials.
The projects did not exist and the only way NAC could repay earlier investors was by soliciting money from new investors, according to prosecutors.
In October 2021, Barber allegedly met with someone he thought was a prospective investor, but who was actually an undercover law enforcement official.
During the meeting, federal prosecutors say Barber made dishonest statements, saying NAC had been in business for 20 years and that the company owned 10 parcels in Laguna Beach. Barber allegedly told the undercover officer that the company had also bought property in Newport Beach and turned it into a four-plex.
“None of these statements was true,” Estrada’s office wrote in a press release Monday.
The second scheme caused investors to lose at least $3.5 million, according to federal prosecutors. Barber allegedly received and kept about $389,000 for himself.
Prosecutors claim Barber failed to tell investors that he was barred from acting or associating with a broker-dealer by the Financial Industry Regulatory Authority, a national nonprofit that regulates the brokerage and securities industries.
A federal grand jury indicted Barber in October 2021. Barber was arrested and released on bond. In January 2023, a court found that Barber violated the terms of his pre-trial release and ordered him to surrender to the U.S. Marshals Service by Jan. 13. Barber did not surrender, according to federal officials.
In March 2023, Barber was arrested in Santa Cruz County, California, and transferred to federal custody in Los Angeles, where he remains, the U.S. Attorney’s Office said.
Zimmerle pleaded guilty in January 2022 to one count of wire fraud for participating in the first scheme.
Judge Wright sentenced Zimmerle to five years’ probation on June 3, and fined him $10,000. He was also ordered to pay $684,500 in restitution to the victims.
