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Santa Barbara Man Admits To $12M Investment Scam

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LOS ANGELES (AP) — A Southern California man has pleaded guilty to running a $12 million investment scam.

Prosecutors say Peter Frommer entered pleas in federal court Tuesday to wire fraud, money laundering and failing to file taxes. He faces up to 33 years in prison.

An indictment said that from 2004 to 2006, the 35-year-old Santa Barbara man ran an investment business that supposedly bought and resold office equipment from defunct companies.

The indictment said Frommer never bought any assets but used the money to repay some investors in a Ponzi-style scheme and the rest to fund a lavish lifestyle.

Authorities say more than 50 investors in several states were bilked.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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