Man accused in scam takes 5th

SACRAMENTO, Calif. -- The owner of an investment firm under investigation for an alleged $813 million Ponzi scheme won't disclose personal and business assets to federal regulators, citing his right to avoid self-incrimination, his attorney said Wednesday.

James Paul Lewis Jr. did not show up Wednesday to answer questions put to him by the Securities and Exchange Commission as part of its lawsuit against Lewis and his firm, Financial Advisory Consultants.

Though no criminal charges have been filed, the FBI and SEC allege Lewis and his firm defrauded more than 5,200 investors. They allege that although he reported his funds were growing by 20 percent to 40 percent a year, he actually was just paying his clients with the money of later investors.

The California Corporations Department has identified investors in Utah, Idaho, Oregon, Colorado, Georgia and California, according to an FBI affidavit.

Many of Lewis' investors learned of Financial Advisory Consultants through friends at church and were eager to get in on a semisecret investment opportunity that appeared open to only a lucky few.

Clients say Lewis is a member of The Church of Jesus Christ of Latter-day Saints, and his first clients came from that community. But over the years, his investors came from churches of many other denominations as well.

A federal judge last week ordered Lewis to provide an accounting of his assets.

"Mr. Lewis, through his attorney, has asserted his Fifth Amendment right against self-incrimination in response to that," said his attorney, Douglas J. Pettibone.

Lewis couldn't provide a complete accounting anyway, Pettibone said, because the FBI took key documents when it raided the El Toro offices of Financial Advisory Consultants last week.

SEC Associate Regional Director Sandra Harris declined comment on Lewis' response.

Authorities say that since June, Lewis has delayed clients' withdrawal requests with the false excuse that millions of dollars in investments had been frozen by the U.S. Department of Homeland Security.

Robert William, 52, of Palm Beach Gardens, Fla., who says he invested his life savings of $2 million with Lewis, said Wednesday he was given the security freeze story in August when he tried to withdraw $90,000. He was allowed to withdraw $20,000 in November and $30,000 in December, but has spent all but $4,300 of that by Wednesday.

"We're flat broke," William said. "We got a double whammy. We're out of money and filing bankruptcy, and I found out I have cancer -- all in one day."

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