- Associated Press - Thursday, November 6, 2014

SANTA ANA, Calif. (AP) - The co-owner of a Southern California real estate investment firm has pleaded guilty to a fraud scheme that bankrupted the company and cost investors and banks more than $110 million.

Federal prosecutors say John Packard of Long Beach pleaded guilty Thursday to mail fraud. He’s facing up to 20 years in federal prison.

Packard and Michael Stewart of Phoenix created a company called Pacific Property Assets to buy, renovate, refinance and sell apartment complexes in Southern California and Arizona. Over a decade, the company acquired more than 100 properties.

Authorities say when the real estate market began to sag, the operation became a Ponzi scheme that used money from new investors to pay debts and earlier investors.

The company filed for bankruptcy in 2009.

Stewart’s trial is pending.

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