Politics & Government

Loma Linda Man Sentenced 30 Months for Tax Crimes Tied to Ponzi Scheme

David Lincoln Johnson, 73, is already facing 14 years in federal prison for his alleged role in a "Southern California Ponzi scheme that caused over $16 million in losses," according to the U.S. Attorney for the Central District of California.

A Loma Linda man was sentenced to 30 months in prison Monday Aug. 13 for filing two false tax returns in which he failed to disclose a personal bank account in Costa Rica to the IRS, according to the U.S. Department of Justice.

David Lincoln Johnson, 73, is already facing 14 years in federal prison for his alleged role in a "Southern California Ponzi scheme that caused over $16 million in losses," according to the U.S. Attorney for the Central District of California.

Johnson and Michael L. Putnam, 68, formerly of Huntington Beach, were convicted of tax crimes related to their involvement in the Genesis Fund, the Justice Department and Internal Revenue Service announced.

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Both men had previously pleaded guilty before U.S. District Judge Dale S. Fischer in the Central District of California in Los Angeles.

The Genesis Fund "was a private investment fund that was marketed as investing in foreign currency trading, but that operated as a Ponzi scheme," according to the original indictment filed in the case.

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According to a plea agreement, Johnson used the Costa Rica bank account to conceal Genesis Fund distributions from the IRS, according to the Justice Department.

Fischer ordered Johnson to pay restitution of $2.3 million - about $1.9 million to investors in the Genesis Fund and $400,000 to the IRS, according to the Justice Department.

 Putnam, currently a resident of St. George, Utah, was sentenced to 12 months and a day in prison for conspiracy and tax fraud, and he was ordered to pay more than $13 million in restitution - about $10 million to investors in the Genesis Fund and $3 million to the IRS, according to the Justice Department.

Putnam cooperated with the government during prosecution of other defendants charged for their involvement in the Genesis Fund, according to court documents.

Johnson received over $2.4 million while Putnam received over $1.5 million, which they hid in foreign bank accounts and did not report to the IRS, according to the Justice Department.

Johnson and Putnam are the 10th and 11th defendants sentenced for crimes related to promotion of the Genesis Fund.

When Johnson was sentenced in July to 14 years in prison, Justice Department said he participated in "a Ponzi scheme that collected, in total, almost $20 million from hundreds of investors around Southern California and that caused over $16 million in losses for those investors."

Johnson was president of , a custom manufacturer of metal products located in Chino, according to the Justice Department. He was sentenced in July by United States District Judge Virginia A. Phillips in Riverside. In addition to the 14-year prison term, the judge ordered Johnson to pay $17.2 million in restitution in the Ponzi scheme case.

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