The owner and operator of a Downey, California, firm has pleaded guilty to wire fraud in a scheme that collected nearly $1 million from victims who were falsely promised that their money would be used to host Christian rock concerts.
The United States Attorney’s Office for the Central District of California says
Lauren Baumann, 43, of Downey, the owner of Stewardship Estates, LLC, pleaded guilty late yesterday before United States District Judge Josephine S. Tucker.
Baumann admitted in court today that she solicited loans from investors with claims that the money would be used to finance “battle of the bands” events featuring Christian rock bands and other music groups that would generate profits from ticket sales and company sponsorships. In some cases, Baumann told investors that the funds would also be used to purchase, refurbish and resell homes.
In fact, a substantial portion of the investors’ funds was used to pay earlier investors, who thought they were receiving profits from Baumann’s venture. Baumann also used investor funds to pay approximately $10,000 a month to rent a historic mansion in Downey and to pay private school tuition for her children, among other personal expenses.Â
As a result of Baumann’s scheme, more than two dozen victims in Orange and Los Angeles counties suffered losses totaling nearly $560,000.
When she pleaded guilty, Baumann also admitted that she failed to disclose to investors that she had been convicted of securities fraud in 1999 in a Texas federal court and that she had been found liable in a related civil fraud action brought by the United States Securities and Exchange Commission.
The charge of wire fraud carries a statutory maximum penalty of 20 years in federal prison. Following the entry of Baumann’s guilty plea late Monday afternoon, Judge Tucker scheduled a sentencing hearing for December 12.
California Watch quotes Baumann as saying
“I am really just hoping there will just be a way to repay everybody,” Baumann said. “At the end of the day, God knows my heart. I felt this was what I had to do, is own what I did wrong.”
It’s a familiar position for Baumann. She pleaded guilty to securities fraud in 1999. At the time, prosecutors and the Securities and Exchange Commission accused her of running a multimillion-dollar pyramid scheme featuring high-profit, low-risk mortgage investments that didn’t actually exist.
Bauman served three years in prison. She said she was unfairly blamed for some of it, but admits: “I clearly made mistakes. I was not prudent. There was money from people to pay other people off.” […]
Out of prison, Baumann headed back to her native California and tried to make money in the loan modification business. She said her biggest concern was how to repay her $2.9 million judgment. […]
Baumann’s loan modification business was hurting from a state law, intended to block fraud, prohibiting advance fees. She said she started to borrow money. She thought she could make it back, she said, from the Christian rock shows.
Baumann kept losing money, so she borrowed more, she said. She admitted in her plea agreement that she used investors’ money to pay back previous investors, as well as for the mansion rent, car payments and private school for her children.
Baumann had become active in a local church called Desert Reign Assembly of God. She told people she had past trouble in Texas but won friends quickly, said pastor Don Metcalf.
“Lauren’s got this persona of being a good, godly person, and she’s very convincing,” he said. “She makes it look like she’s very successful at things.”
Metcalf said he learned later that Baumann was drawing in members of the congregation as investors, including a widow who ended up losing the life insurance money from her husband’s death.
“She used the church to gain access to people,” Metcalf said. “There’s been a lot of people hurt.” […]
Baumann is now waiting for a sentencing hearing in December.
“I’m basically taking whatever time God determines I have to continue investing my time and my talents into the kingdom,” she said. “I’m still believing there’s going to be prosperity.”
The maximum sentence for wire fraud is 20 years in prison, but under the terms of the plea agreement, prosecutors will recommend a lower sentence.
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