Mountain House Golf Course, which was closed because of financial troubles, is one of the many investment vehicles allegedly employed by three Ponzi scheme suspects to defraud hundreds of people.
James Stanley Koenig, 57, of Redding, is in custody in Shasta County with bail set at $5 million.
The investigation by the state Attorney General’s Office alleges that the scheme began in 1997, when three men started peddling real estate and construction projects all over California.
One construction project was the $20 million Mountain House Golf Course, which opened in 2006. The course closed in June 2008 due to a series of lawsuits and the investigation by the office of Attorney General Jerry Brown.
There were nearly 150 victims of the alleged investment scam that promoted the golf course.
Other projects included a light industrial distribution center in Brentwood and dozens of other “investment opportunities.”
In more than 10 years, Koenig created a network with more than 55 business ventures, which, according to the Attorney General’s Office, were poorly managed and financially impractical.
It was all part of an effort to make money to fund a lavish lifestyle, investigators say. State prosecutors charge that Koenig and two others used the investment money to buy an 80-acre castle southwest of Redding, a Lear jet, fancy cars and other extravagant items.
Koenig, along with Gary T. Armitage and Jeffery Guidi, used seminars in the Bay Area to give advice to people they targeted for the projects, people who were mostly retirees, prosecutors say.
After hearing the advice given at these seminars, some Californians invested amounts ranging from $50,000 to more than $1 million, state investigators allege, adding that the Ponzi scheme ultimately collapsed under its own weight, causing hardship to thousands, including many retirees who lost their life savings.
If convicted on all counts — the trio faces 79 in all — each of the three men could face more than 100 years in prison. They will be in court later this month.
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