LOS ANGELES (AP) – Bruce Friedman, a former Los Angeles man charged with running a $200 million real estate investment fraud scheme, died in a French prison while appealing his extradition, an official said Tuesday.
The U.S Embassy official in Paris, who spoke to The Associated Press on condition of anonymity, said he had no further information and referred questions to the U.S. Department of Justice.
Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles, said the office was awaiting confirmation of Friedman’s death.
Friedman, 62, owned Diversified Lending Group Inc., based in the Sherman Oaks area of Los Angeles, which claimed to make money by buying, rehabilitating and renting out properties across the United States.
Friedman’s company promised annual returns of up to 12 percent and bilked hundreds of investors, federal prosecutors contended.
Authorities said Friedman’s business took in $228 million and investors lost nearly $200 million.
Some of the money was used to repay early investors in a classic Ponzi scheme while the rest was plowed into other business ventures _ some affiliated with Friedman’s family and friends _ and a luxurious lifestyle for Friedman that included pricey cars, homes and jewelry, authorities contended.
Friedman donated hundreds of thousands of dollars to charity and had pledged $10 million to help build a children’s museum in the San Fernando Valley.
The unfinished Children’s Museum of Los Angeles filed for bankruptcy in 2009 after a judge froze his assets at the request of the federal Securities and Exchange Commission, which sued Friedman over the purported scheme.
In 2010, a federal grand jury indicted Friedman on 23 counts of mail fraud, wire fraud and money laundering. He could have faced up to 390 years in federal prison if convicted of all charges.
Friedman had been jailed since his arrest in September 2010 outside a hotel in Cannes. It could not immediately be determined if he had a lawyer.
Patricia Hank of Calabasas lost $300,000 in life savings.
“All I can say is, I’m not sorry” that Friedman died, she told the Los Angeles Times (
http://lat.ms/ypYnlx). “That was my entire retirement.”
David Gill, a court-appointed receiver who has been trying to recover some of the investors’ money, told the Times the effort will continue despite Friedman’s death.
AP writer Elaine Ganley contributed to this report from Paris.
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