Jury convicts 'Ponzi scheme' investor accused of bilking millions from Northern N.M. clients

Sep. 26—ALBUQUERQUE — John Lopez inflated his track record as an investor, faked rosy monthly reports to investors, lied to some about what he was doing with their funds and kept the whole house of cards standing by paying old clients with new investors' money.

That was federal prosecutors' message to jurors who convicted the 71-year-old Flagstaff, Ariz., moneyman of 29 counts of fraud and two counts of money laundering in an Albuquerque courtroom Thursday.

"This case is a Ponzi scheme," said Assistant U.S. Attorney Rick Mendenhall during closing arguments Thursday. "This is a game of musical chairs. ... You have some people who eventually lose out because of it."

Defense attorneys argued Lopez may not have been a very good investor, but that doesn't make him a criminal.

"Did John do everything by the book? No. Did he say one thing and do another? Often, yes," said Santa Fe defense attorney Joel R. Meyers. "People make investments. People make decisions. That does not make everything criminal."

Lopez was initially indicted in December 2022 after federal investigators accused him of pilfering millions from unsuspecting clients, many of whom were retired or near retirement and living in Northern New Mexico, including in Santa Fe County.

Lopez told many clients he would employ a mix of investment strategies, but instead spent much of their money on gold and silver that he stored in his home, office and a storage unit, Mendenhall said. During some periods, gold and silver saw declines in value on the open market, but Lopez repeatedly reported inflated returns on investments through falsified monthly email updates to his stable of clients.

"Belief in precious metals is not a defense in this case," Mendenhall said. "It doesn't justify the lies he told people."

Mendenhall reminded jurors many of Lopez's clients, a number of whom testified against him during the week-and-a-half-long trial, made major life changes as a result of the information they were getting from Lopez. One took out a mortgage. Another changed careers. One man bought a truck.

One woman who was defrauded was the daughter of a close friend of Lopez's, Mendenhall said.

Several investors who also said they are close friends with Lopez to this day testified Wednesday he had raised the possibility of precious metal investment with them before, and they were comfortable with it.

Kavin Sorrow of Cuba said he didn't understand how there could be a Ponzi scheme going on when he was getting regular payments from his investments.

"How is that possible and me getting paid every month?" Sorrow said. "I trusted John to put my money where it needed to be to fulfill my retirement."

Kristine Patton, a Flagstaff resident who along with her husband invested about $500,000 with Lopez, said she remembered him talking about precious metals as a strategy to protect from the ups and downs of the market.

"I see him to be honest, fair and of a Christian background," she said.

Patton said she didn't question what Lopez did with their money.

"We let him do his job," she said.

Mendenhall said while several investors in Lopez's orbit were still on good terms with him, it was only a matter of time before the whole system fell apart.

"For this to work, people had to trust him," Mendenhall said.

Defense attorney Meyers described his client as a "good but flawed man" who lived frugally and invested in gold and silver as a way to protect clients' assets.

"John's actions highlight the lack of criminal intent," Meyers said. "We've seen the modest way in which he lives. ... No plane, no boat, no Rolex watch."

Meyers questioned why jurors never heard from several people who were listed as investors in the indictment, and criticized FBI investigators who froze millions of dollars in assets, cutting off Lopez's clients from their savings.

"They're not victims of Mr. Lopez's," he said. "They're a victim of circumstance."

Instead of an individual Charles Schwab account for each investor, Meyers acknowledged, Lopez actually had a single account with many clients' money mixed together in his own name — "perhaps poor accounting and a horrible way to do it," Meyers said. "... [But] he had a strategy."

Meyers also disputed federal prosecutors' assertion Lopez was running a Ponzi scheme.

"Mr. Lopez did not need new investors to pay old investors," Meyers said. "He had literal tons of money, or assets."

Jurors took less than half a day to return guilty verdicts on all 31 counts for Lopez, who attended his trial in a wheelchair and used an oxygen tube.

Lopez faces up to 20 years in prison, according to earlier reports. U.S. Department of Justice spokesperson Tessa DuBerry wrote in an email Thursday afternoon a sentencing hearing will be held at a later date.