Southern California Man Sentenced to 15 Years for House-Flipping Fraud

Brett Barber, 45, a former co-owner of BNZ Capital One LFC and National American Capital, both based in Newport Beach, was sentenced by U.S. District Judge Otis Wright on Monday. Barber is also scheduled for a restitution hearing on January 9.

In October 2023, the defendant pleaded guilty to two counts of wire fraud and one count of criminal contempt related to the scheme.

Prosecutors allege that Barber misled more than 100 investors—many of whom were seniors—into believing they would receive returns of up to 10 percent from real estate “house flipping” deals that were actually fraudulent.

“There may not have been bloodshed, but this was real violence,” Judge Wright stated during the sentencing. “[The defendant] knew these people were in their golden years, and he just took it all.”

According to federal prosecutors, from May 2019 to October 2021, Barber was involved in two schemes designed to defraud victims out of their funds and properties.

Related Stories

In the first scheme, BNZ Capital, along with its owners and several marketers, raised funds by misleading investors into believing their firm was involved in “flipping” homes, purchasing properties, renovating them, and selling them for profit, according to federal officials.

Barber’s associate, Louis Zimmerle, 65, from Sacramento, and the marketers allegedly promised investors a “guaranteed” return between 8 and 10 percent.

Barber purportedly assured investors that their investments were secure and federally backed.

While BNZ Capital did acquire some real estate, there were no actual efforts to develop the properties or flip any for profit, according to prosecutors.

Instead, the funds from investors were allegedly used to compensate Barber, Zimmerle, and others involved in the scheme, including purchasing homes for both Barber and Zimmerle.

Part of the funds were reportedly utilized to pay earlier investors, as stated by the U.S. Attorney’s Office.

Federal officials allege that Barber pocketed over $2.9 million of the investor funds for his own benefit. At least five investors, who were elderly, faced serious financial difficulties due to the fraud, according to the U.S. Attorney’s Office.

“This defendant enriched himself through a fraudulent investment scheme that solicited millions of dollars from retirement funds belonging to his victims, including older adults,” stated U.S. Attorney Martin Estrada in Los Angeles on Monday.

Barber, Zimmerle, and the marketers solicited or directed approximately $13.8 million to BNZ Capital from investors, according to Estrada’s office.

Investigators estimate the total losses from the scheme to be around $7 million.

After Barber learned that federal authorities were investigating BNZ Capital, he initiated a second fraudulent endeavor with a company he established in January 2021, called National American Capital (NAC), as claimed by prosecutors.

The NAC operation was said to function similarly to the initial scheme. Barber allegedly collaborated with marketers to deceive investors by claiming their money would be funneled into real estate development projects, according to federal officials.

These projects were non-existent, and the only means NAC had to repay earlier investors was by attracting new investors, as per prosecutors.

In October 2021, Barber allegedly met with someone he believed to be a potential investor but who was actually an undercover law enforcement agent.

During that meeting, Barber allegedly made false claims, suggesting NAC had been operational for 20 years and that the company owned 10 parcels in Laguna Beach. He also asserted that the company had purchased property in Newport Beach and converted it into a four-plex.

“None of these statements were true,” Estrada’s office indicated in a Monday press release.

The second scheme reportedly resulted in investors losing at least $3.5 million, with Barber allegedly keeping about $389,000 for himself.

Prosecutors assert that Barber failed to inform investors that he was prohibited from acting or associating with a broker-dealer by the Financial Industry Regulatory Authority, a national non-profit body that oversees the brokerage and securities sectors.

A federal grand jury indicted Barber in October 2021. He was arrested and released on bond but a court ordered him to surrender to the U.S. Marshals Service by January 13, 2023, after finding he breached the terms of his pre-trial release. Barber did not turn himself in, according to federal officials.

In March 2023, Barber was apprehended in Santa Cruz County, California, and subsequently transferred to federal custody in Los Angeles, where he currently remains, as reported by the U.S. Attorney’s Office.

Zimmerle pleaded guilty in January 2022 to one count of wire fraud for his involvement in the initial scheme.

Judge Wright sentenced Zimmerle to five years of probation on June 3, along with a $10,000 fine, and ordered him to pay $684,500 in restitution to the victims.