A 45-year-old man accused in the largest Ponzi scheme in Orange County history had his felony conviction reduced to a misdemeanor and was sentenced Tuesday to a day in jail and five years of informal probation.
Adam Jay Boskovich of Laguna Niguel pleaded guilty May 5 to false statements made in the sale or purchase of securities, Senior Deputy District Attorney Marc Labreche said. That charge was reduced to a misdemeanor Tuesday, Boskovich’s attorney, Paul Meyer said.
Boskovich had been facing more than 30 felony counts of false statements. If convicted at trial he could have faced up to 45 years in prison.
Boskovich reached a settlement in a lawsuit on restitution he owes the victims, Meyer said.
“All restitution was satisfied today” by the settlement, the terms of which could not be disclosed, Meyer said.
“We appreciate the thorough evaluation of the district attorney that permitted this case to be resolved as a misdemeanor,” Meyer said.
Labreche said prosecutors had “serious statute of limitations issues” and the victims in the case preferred to avoid a criminal trial so they could get their money back with the civil suit settlement
“Testimony came out during the preliminary hearing that if we did prosecute they would not cooperate,” Labreche said of the victims on May 5.
The main defendant in the alleged $150 million Ponzi scheme is Gerard Frank Cellette, 50, who still faces multiple felonies. He is next due in court July 17.
Of the $150 million in Orange County, 80 investors lost about $21 million, Labreche said. Of that, $17 million came from the investors Boskovich recruited, Labreche alleged.
Boskovich lied to his investors, but apparently did not know Cellette was running a Ponzi scheme, Labreche alleged.
Boskovich and his investors have settled a lawsuit, Labreche said. The amount of the settlement is confidential, he added.
Cellette of Minnesota allegedly masterminded the investment scheme without ever coming to California, prosecutors said.
When Cellette was charged in Orange County he was serving a six-year prison sentence in Minnesota, Labreche said.
Cellette, owner of a “small-time” printing business called Minnesota Print Services Inc., met an Orange County man while he was visiting a relative in Minnesota in 2005, and the Orange County man invested in Cellete’s business, Labreche said.
Cellette paid back the investment, with profit, and offered more investment opportunities, Labreche said.
Cellette typically promised investors returns of 10 percent-15 percent in two to three months, according to Labreche, who said the victims were in California, Minnesota, Georgia, Arizona, Colorado, Hawaii and Illinois.
Between 2005 and 2009, Cellette took in more than $200 million nationwide, including $150 million from Orange County investors, Labreche said.
The net loss in the alleged Ponzi scheme is about $53 million, with $21 million in losses for the Orange County victims, Labreche said. In all, there were 55 investors in California, most of them living in Orange County, he said.
The second-biggest pool of ripped-off investors were in Georgia, Labreche alleged.
Cellette would tell investors he had printing contracts with major corporations and needed money up-front to get a 20 percent discount on purchasing paper, Labreche said.
Cellette allegedly spent the money on himself, including cars, flights on private jets and multiple homes. A Go-Kart track, bowling alley and a 1950s- themed malt shop were among the luxuries at some of his homes, the prosecutor said.
— City News Service
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