Prosecutors: Ponzi Scheme Conned $7M From LA Transit Retirees

LOS ANGELES (CBS) — A San Fernando Valley man accused of conning Los Angeles County transit pensioners out of an estimated $7 million in a Ponzi scheme pleaded guilty on Friday.

Prosecutors say Thomas L. Mitchell, 64, is charged with mail fraud and faces up to 20 years in federal prison.

Mitchell operated or used several companies to perpetrate the scheme, which targeted retirees, many of whom had been employed as transit operators by the Metropolitan Transportation Authority, according to
the U.S. Attorney’s Office.

Prosecutors said Mitchell portrayed himself as a successful investment adviser, falsely promising high investment returns through stocks, bonds or real estate.

Mitchell also reportedly insisted his investments were safe, falsely telling at least one victim that her money was insured by the federal government.

With these and other bogus claims, Mitchell convinced victims to transfer their retirement funds from their employers’ retirement plans into accounts that he controlled, according to federal officials.

Mitchell’s Ponzi scheme, which operated from 1995 to 2010, “placed only a minuscule fraction of the retiree victims’ money in legitimate investments,” according to the plea agreement.

“Moreover, instead of taking steps to protect the retiree victims’ principal investments, (Mitchell) misappropriated virtually all of their money to, among other things, live a lavish lifestyle,” which included a luxury apartment, three luxury automobiles, expensive vacations, high-end restaurants and tickets to sporting events and shows, according to the U.S. Attorney’s Office.

As part of his plea agreement, Mitchell agreed to pay restitution of about $7 million, and is expected to make his initial federal court appearance April 21.

Last year, the U.S. Securities and Exchange Commission sued Mitchell and his companies, obtaining an injunction and an order freezing his assets, prosecutors said.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

  • Prosecutors: Ponzi Scheme Conned $7M From LA Transit Retirees | Los Angeles for Me

    […] Thomas Mitchell, 64, pleaded guilty to a scheme that cheated retired transit operators by the Metropolitan Transportation Authority out of an estimated $7 million. More from:… […]

  • WH Jones

    I’m just glad the caught the perp before he fled back to Mexico. SCORE ONE FOR THE U.S.!!!

    • Pete

      Back to Mexico? What does that mean, moron? I don’t see a Spanish surname. I see “Thomas L. Mitchell” that’s WASP, white anglo saxon person, in case you don’t know the accronym. You’re probably one of his victims and just have to rage against someone, and latinos are you’re usual targets. Next time read and edit you’re comments before you post. Maybe you’ll have something intelligent to add.

      • ed

        FYI, we “Latinos” like You “WHITES” (since you do not seem have ethnicity) come from all regions of the world. an Spanish Surname does not mean anything.
        Oh, by the way my name is Edward Ross (Nicaraguan)!

    • Andrelini Corleone

      How is Mitchell even Latino? Pendejo!

  • bounce

    >> As part of his plea agreement, Mitchell agreed to pay restitution of about $7 million

    How is he going to pay back $7M if virtually all the money is gone and he doesn’t have a source of income? That’s nothing more than an empty promise.

  • alan hart

    The definition of a Ponzi scheme is paying older investors back with new investor’s money. You know, like Social Security.

    • Duh!

      That’s not really the way it is supposed to work.
      However, with the Democrats spending the SS money instead of investing it to have money to pay for retirees, they have to use the incoming contributions to pay for people who have retired.

      Makes you wonder why anyone would vote to put a Democrat in office.

      • Looknn

        Ah, you republicans, never give up with your lies! Republicans are why we are in the mess we are in now. But that is true and I keep forgetting, you republicans only deal in lies and deceit.

  • vincent knight


  • vincent knight


  • vincent knight

    NEXT PONZI SCHEME,frome the president of the united states,id like to lower gasolene prices and open the oil reserves,but my hands are tied

  • vincent knight


  • deloris knight


  • Obama Is Better Than God & Jesus

    Take your meds, you loon.

  • Joe Gallagher

    Mitchel committed a serious crime, and like any other crime it is Obama’s fault. In fact if you sneeze its Obama’s fault.

  • critical review

    Thomas Mitchell is a black version of Bernie Madoff. He made be black, but he has no soul to steal from people who’ve worked hard their entire life. I know a few people he swindled out of their life savings. To put it politely; while in prison I hope some big, bad man makes Thomas his girlfriend.

    As for you political grand standers who inappropriately turn every forum into an opportunity to vent your personal problems get professional psychiatric help now!

  • upyours

    “Mitchell agreed to pay restitution of about $7 million”, he still has $7 million? Dumbas$.

  • Mary Thompson

    I hope he rots away for the rest of his life in jail. He ruined so many peoples lives and didn’t think twice about stealing their hard earned money. Who does this, an evil, selfish person.

    • TechGromit

      Every time I read yet another story about someone who lost everything on a Ponzi scheme, I just shake my head and say they have no one to blame but themselves. While I can understand, even sympathize with people that lose money on Ponzi scheme’s, all too often they lose EVERYTHING! Investing 101, Diversify. Even if one of your investments is doing Great, you should never throw all of your money into one investment vehicle. Always make sure you are spreading your investments over several different investments. It protects you in case one of them suffers heavy losses (or get wiped out like a Ponzi scheme). They were all Greedy, Foolish and are paying the price. Sure they can belly ache how some guy took advantage of them, but in the end they just have to look in the mirror to see who really lost there life savings.

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  • Name

    I did a name search and virtually every ‘news’ site that is running this story is complete without a picture. How is this? Why no picture of a white collar thief that stole blue collar money?

    Oh, and to the morons that were arguing over ethnicity, do a name search (type in the name to google and press enter) and you’ll both learn something.

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