More than 1,500 Bay Area residents, many of them retirees, say they collectively lost about $700 million after investing with a Lafayette investment fund. Now they’ve filed a class-action lawsuit an effort to recoup their lives’ savings.
SF Bay Area Local investment fund accused of defrauding investors out of $700 million
Phyllis Christopher and her former husband spent years pinching pennies so they would be comfortable in retirement. As part of their financial plan, the couple invested their savings -- more than $600,000 -- into a fund run by Bar-K, a Lafayette company.
But when they tried to cash out in 2007, fund manager Walter Ng told them that the funds were not available because of "a minor cash flow problem." Christopher recalls sitting in the investment office and crying upon hearing the news. Her first thought: She would have to sell her house.
It didn't take long for the "minor cash flow problem" to become a major crisis, not just for the Christophers but for an estimated 1,500 other Bay Area investors who had deposited millions with the company. Today, the 84-year-old Ng, youngest son Kelly, 57, and business associate Bruce Horwitz stand accused in a civil action of conning investors out of more than $700 million in IRA accounts, inheritances and other assets cobbled together over a lifetime -- in what may be one of the biggest Ponzi schemes in California's history.
Investors, most of them residents of Contra Costa and Alameda counties, have lost their savings and their homes. But despite the staggering losses, the managers who ran the fund have never been prosecuted for the alleged theft, leaving investors bitter and angry at a system they say failed them.
"When someone literally steals your money from you, it's a horrible feeling," says the 69-year-old Christopher, who lives in Rossmoor. "It's embarrassing and humiliating. But what is worse is that nothing has been done about it."