There is good news for many of the victims bilked in a fraudulent liquor license investment scheme by former San Diego restaurateur Gina Champion-Cain.

The federal court overseeing the receivership of Champion-Cain and her various entities recently approved a settlement between court-appointed receiver Krista Frietag, Chicago Title, and a number of other victims.

“When combined with the receiver’s other recoveries, as well as settlements of other victims’ lawsuits against Chicago Title, it appears that most of the victims will recoup approximately 90% to 95% of their net losses, if not more,” said attorney Mark Cramer, chair of the class action practice group of Buchalter, which represented about 80 of the victims of Champion-Cain’s Ponzi scheme.

Noting there were roughly a dozen lawsuits filed against Chicago Title, Cramer pointed out: “In most cases involving Ponzi schemes, the victims are lucky to get pennies on the dollar. The recovery for the victims of Champion-Cain’s scheme is a remarkable result in an otherwise tragic situation.”

Cramer added almost all of the investment victims have reached settlements with Chicago Title. In addition, he said the court-appointed receiver has spent years marshaling the assets of Champion-Cain and her various entities. “The receiver’s job is to try to identify, locate, and safeguard what was left when the scheme collapsed,” Cramer said adding, “The receiver is trying to put Humpty Dumpty back together again.”

Champion-Cain, a long-time San Diego business leader, restaurateur, and real estate magnate, was sentenced in federal court to a 15-year prison term for masterminding a massive, years-long Ponzi scheme and obstructing justice by hiding and destroying evidence from federal investigators.

When Champion-Cain pleaded guilty on July 22, 2020, she admitted that she raised more than $350 million from investors by promising to use their money to make loans to business owners who were attempting to acquire California liquor licenses.

However, according to court records, Champion-Cain and her co-conspirators instead used funds from new investors to pay back others whose investments would soon be redeemed, and embezzled funds to support her other businesses and her lifestyle.

Champion-Cain and her co-conspirators kept the scheme going by, among other things, fabricating documents, forging signatures, and telling investors lies through fake email accounts, so that when investors attempted to double-check on their investments with third parties, they were often really communicating with the defendant or her employees.

Cramer said his clients, and all the other victims thought their money was safe in escrow. “What doesn’t get reported enough is the emotional toll schemes like this have on the victims and their families. It takes more than money to heal those kinds of wounds,” he said adding, “With the benefit of hindsight, a lot of victims ask themselves, ‘Why didn’t I figure this out?’ But the reality is, they aren’t alone. There are hundreds of victims of this scheme, including sophisticated people, banks, and investment firms, that didn’t figure it out either.”

In handing down Champion-Cain’s sentence, U.S. District Judge Larry Alan Burns told the defendant her scheme demonstrated “tremendous callousness” and “extreme avarice” in committing a “monumental crime.”

“This is a fitting sentence for a defendant who caused significant harm to hundreds of victims,” said acting U.S. Attorney Randy Grossman. “This Ponzi scheme cost investors hundreds of millions of dollars while the defendant lived in luxury.”

“For years, Gina Champion-Cain used her status in the community to lie, cheat, and steal more than a staggering $350 million dollars, all from investors who trusted her with their hard-earned money and, in many instances, their life’s savings,” said FBI special agent in charge Suzanne Turner. “While the victims have suffered significantly from the defendant’s betrayal, we hope the sentence will bring some closure as they see Champion-Cain being held accountable for the damage she has caused. Let this serve as a warning that the FBI is dedicated to protecting the community from criminals, like Champion-Cain, who commit investment fraud.”

Cramer pointed out Champion-Cain “was using proceeds from the Ponzi scheme to prop up her failing businesses, her Airbnbs, her restaurants, and shops. She was taking investor’s money to make payroll and cover the overhead expenses of her various businesses, which was part of the scheme.”

Concluded Cramer: “Every Ponzi scheme will eventually fail because the schemer can’t continue to generate enough money to pay off the early investors. Champion-Cain’s scheme was no exception.”