California Investment Advisor Pleads Guilty To Defrauding Investors

Eliane Chavagnon

7 March 2013

A former investment advisor in Fresno, CA, has pleaded guilty to three counts of mail fraud and one count of bankruptcy in connection with a scheme that caused his investors to lose a total of some $3.2 million, according to US Attorney Benjamin Wagner.

Joseph Randall Medcalf, 56, admitted that he carried out a scheme from “at least” May 2002 through October 2007, during which time he offered fake investment opportunities in entities he controlled such as All Valley Holdings and CenCal Value Investments, among other ventures.

Medcalf did not register these investments with either the Securities and Exchange Commission or other governmental entities. He also convinced some investors to transfer to him investments from secure IRAs and other legitimate investments, according to a statement from the Federal Bureau of Investigation.

“In some cases, Medcalf’s investments were nonexistent; in other cases, they were failing and worthless,” the FBI said. “Medcalf frequently did not even invest the funds, but either paid other investors ‘returns’ on their investments or spent it for his own personal use.”

Medcalf “usually guaranteed” an interest rate of between 6 and 8 per cent, while telling investors that the principal and interest would be returned at the end of the term, the agency added, citing court documents.

Meanwhile, he also gave unauthorized promissory notes and subscription agreements stating the investment’s time period and guaranteed rate of return, alongside the delivery of financial statements illustrating “substantial returns.”

Additionally, in an attempt to prevent disclosure of his scheme, Medcalf filed a bankruptcy petition in which he failed to reveal his connection with All Valley Holdings and CenCal Value Investments.

Medcalf has remained in custody since December 2011 and is scheduled to be sentenced on May 13.

The FBI said the plea agreement provides for a sentence of six and a half years in prison, but the actual sentence will be determined by the court at the sentencing hearing.