A Moreno Valley man accused of swindling dozens of people, many of them seniors, out of millions of dollars in a Ponzi scheme that involved a bogus investment strategy promising annual gains safe from stock market gyrations was arrested Thursday.

Paul Horton Smith, 56, is federally charged with wire fraud and could face up to 20 years in prison if convicted.

Smith was taken into custody by FBI agents after a criminal complaint was filed by the U.S. Attorney’s Office. He was expected to make an initial appearance in U.S. District Court in Riverside. Bond information was not immediately known.

According to federal prosecutors, from at least 2013 to the present, the defendant allegedly operated “Northstar,” a closed annuity provider offering contracts with purported guaranteed returns of 5% to 6% annually, unaffected by swings in equities. A subsidiary business run by Smith was called Planning Services Inc.

“Smith … advertised himself on his website as a chartered senior financial planner and … also conducted free seminars via Planning Services at various locations around the Riverside area, where he discussed estate planning, trust creation to protect assets and other financial matters,” according to a U.S. Attorney’s Office statement. “Smith solicited some of his victims at seminars.”

Prosecutors allege Northstar was little but a shell company, functioning to conceal the defendant’s scheme of gathering a circle of unwitting investors, paying the ones on the back end with funds placed in his care by investors on the front end.

Court papers offer examples of what happened to the roughly 75 alleged victims, including a 70-year-old woman who went to church with Smith and turned over $175,000 for him to invest.

“Instead of investing the victim’s money, Smith transferred her funds to other investors, and he used her money to pay off the other investors’ tax bills with the IRS and the California Franchise Tax Board,” the U.S. Attorney’s Office stated.

An 86-year-old woman who took the defendant into her confidence gave him $169,000 from a property liquidation to invest, but Smith allegedly used the bulk of the funds pay another investor who had purchased an annuity contract earlier, according to prosecutors.

Investigators uncovered upwards of $10 million allegedly transferred to Smith over a seven-year span, though it’s suspected the alleged scheme stretched back farther, according to court papers.

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