The Petaluma investment manager charged with stealing more than $20 million from local investors pleaded not guilty during his arraignment Friday morning at Sonoma County Superior Court.
According to charges by the District Attorney and Attorney General’s office, Aldo Baccala engaged in a decades-long Ponzi scheme in which he promised friends and associates returns between 12 and 27 percent in exchange for investing their money with him.
Some received returns on their investments as Baccala allegedly used new investment funds to pay longtime customers, according to the indictment. But in 2008, he sent a letter to his investors saying that he could no longer provide returns. He was sued by 85 investors in 2008, Baccala’s assets liquidated and the plaintiffs awarded a total of $21 million.
On Friday, only one victim of the alleged fraud was in court, Maribel Chin, who said that she and her husband Edward met Baccala socially in Petaluma and decided to invest with him.
“We are just working class people,” said Chin, a retired X-ray technician. “But my husband doesn’t think this is worth it; that we’ll get a cent out of it.”
Baccala’s ventures included investing in assisted living facilities, a car wash and other businesses.
Another plan was to invest $3.2 million to convert an old bourbon distillery into an ethonol production plant, but investors never collected a dime. Overall, investigators say Baccala lost more than $8 million on the stock market, essentially playing with his clients money and possibly pocketing the rest.
Baccala has been charged with 164 counts of making false statements, elder abuse and fraud. If convicted on all of the charges, he faces 148 years in prison and will have to repay investors $3.2 million.
Asked about whether Baccala, now retired, had any assets left, his attorney Stephen Gallenson said that he believed Baccala was living off Social Security. Judge Rene Chouteau ordered Baccala back in court on August 9 for a settlement conference.
As part of negotiations, Baccala’s attorney and the District Attorney’s office will discuss whether any charges can be dropped, the sentence reduced and the settlement amount reduced.
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