An Agoura Hills man, once an active volunteer with youth soccer and basketball leagues in the area, will face up to 20 years in prison for his involvement in a $20-million Ponzi scheme that snared investors across the country, including many in the Conejo Valley.
On May 31, the United States Attorney’s Office, California Central District, brought criminal charges against 50-year-old Dean Peter Gross following a three-year investigation. In a plea agreement, Gross admitted to fraud and other charges connected with the scam.
A Ponzi scheme is an investment scam that pays returns out of the investors’ own money rather than from profit that was earned legitimately.
According to the charge, Gross presented himself as an advertising industry veteran with extensive connections that allowed him to buy advertising time and space at a discount, and to resell it at a substantial profit to large, well-known corporations.
Gross used the fictitious business name Bridon Entertainment to con would-be investors, who were promised 8 percent quarterly returns.
Gross launched the scam in January 2006, but in mid-2009 the Ponzi scheme began to unravel when new investors couldn’t be found to perpetuate the scam.
Bill, a 68-year-old Westlake Village resident who asked that his full name not be disclosed, said Gross used some of the funds to pay off investors while taking a substantial portion for his personal use.
According to a separate civil case filed by the Securities and Exchange Commission, Gross paid himself more than $6 million.
Bill met Gross through a business acquaintance. Gross came highly recommended because he was a family man and had been a soccer coach with the Agoura Youth Soccer Association.
“ I’m ultraconservative. I know Ponzi schemes,” Bill said. “(Gross) didn’t have new cars or a big house—(He lived) a pretty normal life.”
The facade fooled investors, the victim said.
“ The list of tragedies is lengthy,” he said. Some people lost their homes, while one woman from Arkansas died from a heart attack that was exacerbated by stress over the loss of so much money, Bill said.
Initially, Gross paid investors the interest they were owed, but when given the option to roll the money over into a new agreement for a similar investment, most investors complied because of the promising returns.
“In fact, however, defendant Gross did not have contracts with well-known corporations for the resale of advertising time and space,” the complaint said.“Gross used money from investors to make Ponzi payments to other investors that defendant Gross falsely characterized as investment profits.”
In all, Gross hoodwinked 30 people, including many in the Conejo Valley.
Gary, an Agoura Hills resident since 1984 who also wished to remain anonymous, said he cooperated fully with the FBI in the investigation of Gross.
“We couldn’t wait to turn him in,” the victim said.
“This guy was so smooth that he even bilked astute investors,” Gary said. “We served on the AYSO soccer board together in ’95-’96. He lived a couple of miles away from me. Our sons were in soccer (together).”
Ken, a Westlake Village resident who declined to give his full name also, was taken for $250,000. Ken met Gross more than 10 years ago when they both coached youth basketball teams.
“The whole advertising investment ( story) fit with his work experience,” Ken said. “ Otherwise I wouldn’t have done it.”
The victim said he began to worry about his investment decision the first time Gross missed a payment; as the excuses kept coming, worry turned to dismay.
“How can you not be impacted by that size of a loss?” he said.
Victim Gary wonders the stolen money was spent, and asks, “Did he blow it up his nose, did he gamble it, what did he do with it?”
The plea agreement requires Gross to make restitution, although much of the money remains missing.
The victims lost about $13.8 million, said Thom Mrozek, a spokesperson for the U.S. Attorney’s Office.
Mrozek said his staff will try to identify Gross’s remaining assets.
“(We will) do everything we can to recover as much money as possible for the victims,” he said.
The victims find it hard to believe that they fell for a classic Ponzi scheme and are baffled that their former friend never offered an apology.
“What longtime friends cannot understand is how Gross could lie to them, face-to-face, for over three years,” Bill said.
Ken gave a warning to people who might be enticed by the promise of easy money.
“If it seems too good to be true, it’s too good to be true,” Ken said. “I should have known better. . . . I just blame me.”