RIVERSIDE: The judge in the alleged Ponzi scheme case granted a defense request for document copies.

10:00 PM PST on Wednesday, December 1, 2010

The fourth day of a preliminary hearing on an alleged $142 million investment mortgage and securities fraud based in Riverside County barely got started Wednesday when it was postponed until Jan. 24.

Riverside County Superior Court Judge Patrick F. Magers called for a recess at the request of James Warren, lawyer for James Duncan, the alleged mastermind of the fraud for which seven defendants were arrested a year ago.

The judge granted Warren's demand for all of the defense attorneys to receive copies of the bank statements, e-mails and other documentation that the Riverside County district attorney plans to present at trial to prove investors were victims of a Ponzi scheme, in which money provided by later investors was used to repay earlier investors.

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FRAUD HEARING TESTIMONY: Five defendants are accused of 249 counts, including bilking the loan officer out of $344,000.

An investor who placed unquestioning confidence in an allegedly fraudulent investment group in Riverside County lost more than $344,000, an investigator for the Riverside County district attorney said in court Wednesday.

David Berman, a loan officer from Orange County with no previous investment experience, agreed to hand over his finances to an organization called Pacific Wealth Management for three years and to follow its directions without question, said investigator Craig Johnson, who interviewed Berman.

Johnson testified in the third day of a preliminary hearing regarding an alleged $142 million securities and mortgage fraud orchestrated by Pacific Wealth Management (which is not related to a company of the same name in San Diego) and controlled by Murrieta businessman James B. Duncan.

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