It used to be that parent-teacher associations would sponsor a simple bake sale to raise funds for the school. But three PTA moms in California found a much more effective way of cashing in: They allegedly collected nearly $14 million from investors in a phony get-rich-quick scheme and now could face up to 13 years in prison.
Here's how they -- almost -- got away with the crazy scam:
Maricela Barajas, Juliana Menefee, and Eva Perez used PTA functions and other school events to befriend and recruit investors in their fake business -- selling products from a well-known local dairy exclusively to Disneyland -- and promised a rate of return of up to 100 percent. This is the sad part: The idea sounded so enticing that many victims actually took out second mortgages on their homes, maxed out their credit cards, and drained life savings account just so they could invest in the scam.
All together the trio collected $14 million -- in cash! -- but started running into problems when investors started demanding payments and one filed a complaint with the sheriff's office. The three women returned $10 million, but the additional $4 million is still unaccounted for ... Investigators believe that in addition to a loss of $1.5 million, the remainder of the unaccounted for cash was spent on lavish vacations, expensive hotels, new cars, and casinos in California and Nevada.
Of course, this Ponzi-style scheme -- especially one with such a high rate of return -- seems suspect to the average person. But it's easy in this case to see why the victims were so trusting -- they met the women at the PTA! It's infuriating that parents would abuse their position at the school to prey on unsuspecting, hardworking people especially because most of the victims told police they were just trying "to make a better life for themselves and their families." Now the investors have to suffer the embarrassment and loss of being suckered into a fraudulent scheme.
As for the three moms? They face 22 counts each of grand theft of personal property and securities fraud and, if convicted, could face up to 13 years in prison.
Oh, and in case you were wondering, their PTA memberships have been revoked.
Image via Rochelle, just Rochelle/Flickr