Two people arrested in Santa Clarita for allegedly operating a Ponzi scheme were arraigned in court this week. Director Dror Soref and an Michelle Seward, of Valencia, were arrested in September under the suspicion of violating California Corporations Code 25110. Soref is best known for directing some of Weird Al Yankovic’s music videos. Basically, the two have been arrested for allegedly operating a Ponzi scheme that stiffed their clients out of millions of dollars.
Ponzi schemes are named after the first, and most notorious, perpetrator of the scheme: Charles Ponzi. The scheme consists of creating an investment vehicle that takes one investor’s money and uses it to pay off other investors, tricking them into thinking that the investment vehicle is making a profit.
Soref and Seward’s scheme is believed to have cheated residents of Los Angeles and Kern Counties out of $21 million dollars. The two are alleged to have persuaded clients into surrendering annuities early, with the promise of earning 10 to 18 percent profit.
Such guarantees have been the hallmark of Ponzi scheme operators for years, and are one of the easiest ways to spot them. Any investor knows that no investment is guaranteed, but Ponzi scheme operators typically prey on the inexperienced and gullible; often making promises of returns that are too good to be true.
The two are due back in court November 16.
