Sept. 26—ALBUQUERQUE — John Lopez inflated his record as an investor, falsified rosy monthly reports to investors, lied to some about what he did with their money and kept the whole house of cards afloat by paying old customers with new investors.” money.
That was the message from federal prosecutors to jurors who convicted the 71-year-old Flagstaff, Ariz., money man in an Albuquerque courtroom Thursday of 29 counts of fraud and two counts of money laundering.
“This case is a Ponzi scheme,” Assistant U.S. Attorney Rick Mendenhall said during closing arguments Thursday. “This is a game of musical chairs. … You have some people who end up being victims.”
Defense attorneys argued that 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 attorney Joel R. Meyers. “People make investments. People make decisions. That doesn’t make everything criminal.”
Lopez was initially charged in December 2022 after federal investigators accused him of stealing 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 that he would use a mix of investment strategies but instead spend much of their money on gold and silver that he kept in his home, office and a storage unit, Mendenhall said. During certain periods, gold and silver declined in value on the open market, but Lopez repeatedly overreported investment returns through spoofed monthly email updates to his customer base.
“Faith in precious metals is not a defense in this case,” Mendenhall said. “It doesn’t justify the lies he told people.”
Mendenhall reminded jurors that many of Lopez’s clients, several of whom testified against him during the week-and-a-half trial, had made major changes in their lives as a result of the information they received from Lopez. One has taken out a mortgage. Another changed careers. One man bought a truck.
One woman who was cheated on was the daughter of a close friend of Lopez’s, Mendenhall said.
Several investors who also said they remain close friends with Lopez to this day testified Wednesday that he had previously discussed the possibility of precious metals investments with them, and that they felt comfortable doing so.
Kavin Sorrow of Cuba said he did not understand how there could be a Ponzi scheme while he was receiving regular payments from his investments.
“How is that possible and do I get paid every month?” Sadness said. “I trusted John to put my money where it needed to be to fulfill my retirement needs.”
Kristine Patton, a Flagstaff resident who invested about $500,000 with Lopez with her husband, said she remembered him talking about precious metals as a strategy to protect against the market’s ups and downs.
“I see that he is honest and fair and comes from a Christian background,” she said.
Patton said she didn’t question what Lopez did with their money.
“We let him do his work,” she said.
Mendenhall said that while several investors in Lopez’s orbit were still on good terms with him, it was only a matter of time before the entire system fell apart.
“For this to work, people had to trust him,” Mendenhall said.
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 his clients’ assets.
“John’s actions highlight the lack of criminal intent,” Meyers said. “We’ve seen the modest way he lives. … No plane, no boat, no Rolex watch.”
Meyers questioned why jurors never heard from several people listed in the indictment as investors and criticized FBI investigators who froze millions of dollars in assets, cutting Lopez’s clients off from their life savings.
“They are not victims of Mr. Lopez,” he said. “They are victims of circumstances.”
Instead of an individual Charles Schwab account for each investor, Meyers acknowledged, Lopez actually had a single account with many clients’ money mixed in his own name — “maybe poor accounting and a terrible way to do it,” said Meyers. “… [But] He had a strategy.”
Meyers also disputed federal prosecutors’ claim that Lopez was running a Ponzi scheme.
“Mr. Lopez did not need new investors to pay old investors,” Meyers said. “He literally had tons of money or assets.”
Jurors took less than half a day to find guilty on all 31 charges against Lopez, who attended his trial in a wheelchair and used an oxygen tube.
According to previous reports, Lopez faces a prison sentence of 20 years. U.S. Department of Justice spokesperson Tessa DuBerry wrote in an email Thursday afternoon that a sentencing hearing will take place at a later date.
