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North County pair arrested for defrauding Spanish-speaking investors out of $1.3 million

by John Gomez | Last Updated: November 6, 2009

November 6, 2009 – Authorities say two men arrested this week bilked at least 27 victims – mostly Spanish-speaking, working-class people from North San Diego County – out of about $1.3 million.

On Thursday in a San Diego courthouse, victims and prosecutors described Alan Espiritu, 35, as a smooth talker who convinced friends old and new to invest in his fake real estate company, among other schemes, then pocketed the money.

His co-defendant, Cesar Moreno, 40, who police say worked at two North County banks, allegedly found victims for Espiritu. Police say he identified small-business owners and other depositors and, in some cases, convinced them to open a line of credit and hand over the money to Espiritu.

Espiritu is facing 68 felony counts that include grand theft and corporations code violations, which could mean up to 36 years in prison, Deputy District Attorney Lisa Missett said. Moreno faces up to 15 years in prison for fewer counts of similar charges, she said.

Both men pleaded not guilty Thursday. Judge David Szumowski set Espiritu’s bail at $1.5 million, Moreno’s at $1 million. They were both arrested Tuesday and are being held at the Vista jail.

Carlsbad police Detective Patty Parra became aware of the alleged fraud in early 2008 and conducted an extensive investigation, according to a news release.

“What makes this case so awful is that Espiritu and Moreno preyed on a vulnerable group of hard-working people who lived frugal lives, saving every dollar they could,” Parra said in a statement.

Seven people who said they were Espiritu’s victims attended the court hearing.

Rosalina Santiago, 33, of San Marcos, said she gave Espiritu her life’s savings, $10,000, last year. An insurance saleswoman she met through her boss at a hair salon told her the Carlsbad businessman could get her a 10 percent monthly return on her investment, she said.

Espiritu was smart and convincing, she said. After signing paperwork, she turned over her savings.

When he was supposed to pay, he strung her along, Santiago said. Eventually, she tried to track him down at his Carlsbad office. There was no one there, she said.

Now unemployed, with a husband whose construction work has dried up, Santiago said she is having trouble paying rent and buying diapers for her 3-month-old daughter.

Missett, the prosecutor, said Espiritu preyed on friends and found his victims through a wide network in the Spanish-speaking community. Espiritu allegedly represented himself as the head of Permex Corp., a bogus real estate development company that promised investors returns of up to 25 percent.

Neo Aguilar, a 33-year-old Oceanside insurance salesman, said he met Espiritu through a friend and believed he was a savvy investor. Aguilar said he convinced his nephew to invest about $40,000 with Espiritu, and added $10,000 of his own.

In the meantime, Espiritu said he could help Aguilar modify the loan on his Oceanside home, Aguilar said.

He said Espiritu told him to stop making payments to the mortgage company; that Espiritu would handle the payments on the home, become part-owner and wrap the home’s mortgage into some kind of investment, Aguilar said.

Espiritu eventually told him it hadn’t worked; he’d lost the home. He also lost his own and his nephew’s money, Aguilar said.

As a result, Aguilar said his health declined and he had to move his family into an apartment.

Aguilar said he has sold everything he owns to make ends meet and is trying to sell two plots at Eternal Hills in Oceanside to make this month’s rent.

Aguilar called the Carlsbad Police Department, launching its investigation.

Moreno, Espiritu’s co-defendant, worked at a Carlsbad Washington Mutual and a Vista Wells Fargo and would persuade customers to take out lines of credit or use their own savings to invest in Espiritu’s company, according to Parra’s testimony in a March affidavit seeking a search warrant for Moreno’s accounts.

In the course of her investigation, Parra found a restaurant owner who Moreno convinced to open a $60,000 line of credit, according to documents.

Moreno then introduced the businesswoman to Espiritu.

Cristobal Vaca, a 40-year-old San Marcos restaurant owner, said Epiritu, a trusted friend of 13 years, ultimately took more than $200,000 from him through fake investments.

Both Moreno and Espiritu are permanent residents from Mexico with longtime ties to North County, Missett said. She said both men appear to have spent their victims’ money on a good life, and have nothing to show for it.

She broke the news to Vaca after the hearing.

“Realistically, I don’t think you should expect to get anything back,” she told him.

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