Former Rives Mansion tenant admits to fraud

DOWNEY - Lauren Baumann, the owner of a Downey realty firm and former tenant of the Rives Mansion, pleaded guilty to federal wire fraud charges Monday after allegedly defrauding investors out of nearly $1 million in a ponzi scheme.Baumann, 43, of Downey, owns Stewardship Estates LLC. Baumann admitted in court Monday that she solicited loans from investors with claims that the money would be used to finance "battle of the bands" events featuring Christian rock bands, which would generate profits from ticket sales and sponsorships. In some cases, Baumann told investors that the funds would also be used to purchase, refurbish and resell homes, authorities claim. A substantial portion of the investors' funds was used to pay earlier investors, who thought they were receiving profits from Baumann's venture, investigators claim. Baumann also allegedly used investor funds to pay approximately $10,000 a month to rent the Rives Mansion and pay private school tuition for her children, among other personal expenses. According to the U.S. Attorney General's office, more than two dozen victims in Orange and Los Angeles counties suffered losses totaling nearly $560,000. When she pleaded guilty, Baumann also admitted that she failed to disclose to investors that she had been convicted of securities fraud in 1999 in a Texas federal court and that she had been found liable in a related civil fraud action brought by the United States Securities and Exchange Commission. Baumann will be sentenced Dec. 12. She faces a maximum penalty of 20 years in federal prison.

********** Published: October 06, 2011 - Volume 10 - Issue 25