Deal Offered to Alleged Ponzi Schemer

Leticia Sandoval Offered Plea Deal

A Gilroy woman accused of defrauding 17 people of more than half a million dollars may serve six years in state prison after pleading no contest to 22 counts of grand theft, securities fraud, embezzlement and burglary in Santa Clara County Superior Court on Nov. 19.
Leticia Sandoval had been facing up to 24 years before agreeing to an informal deal proposed by Judge Edward Lee: admit the charges and forego a trial in exchange for a reduced maximum sentence. Lee proposed a sentence of six years after Sandoval and deputy district attorney Vishal Bathija could not agree on a plea bargain, said Bathija.
After discussions with both sides, Lee decided that an earlier release date would benefit the victims by allowing Sandoval to at least partially repay her debts.
“Despite stealing all of that money, I would rather she focused on repaying some of that money rather than making big rocks into little rocks,” Lee said.
Lee also considered Sandoval’s lack of a prior criminal record and expressions of remorse, said her attorney, Milton Gonzalez. Her borrowing was motivated not by greed but by a desperate drive to settle all her accounts, Gonzalez said.
“She was very sorry, she was very remorseful. She couldn’t stop it. She got herself in a deeper and deeper hole.”
The six-year sentence is not a formal plea bargain, which can only be made by the prosecuting attorney. Lee is still waiting for Sandoval’s probation report and further information from prosecution and defense attorneys before making his final decision on the reduced sentence. If he changes his mind and abandons the six-year deal before Sandoval’s sentencing hearing, which is scheduled for Jan. 29, she is free to withdraw her plea, essentially starting over from where she was before the Nov. 19 hearing.
Gilroy Police Department began investigating Sandoval earlier this year after several residents complained about her money-transfer business, according to Detective Richard Jenkins’ April 21 affidavit. He recognized her name from a 2012 investigation into an Intermex employee who had embezzled up to $120,000 from three locations in Gilroy and Salinas.
Jenkins’ investigation culminated in an arrest warrant issued May 20. According to his affidavit, he uncovered a consistent pattern of predatory behavior. Sandoval targeted working-class, primarily Spanish-speaking Latino residents of Gilroy whose trust she had gained over years of faithfully transacting money transfers. She consistently exploited two methods of extracting money from her victims, Jenkins wrote.
Her most basic scam was a money-wiring operation whereby she would entice clients with an above-market peso-to-dollar exchange rate, Jenkins wrote. She claimed to do this by waiting for the peso to drop in value before making the transfer to the customer’s family in Mexico.
According the the affidavit, Sandoval’s more lucrative swindle involved ambitious ventures, usually an arbitrage scheme in which she claimed to buy pesos at a low price and sell them at a higher one. She would solicit investments of tens thousands of dollars and promise to pay a spectacular return.
Whichever method she employed, her victims were typically customers who had had favorable experiences with her business in the past, according to Jenkins. They were typically persuaded to give as much as they could, often their life’s savings. And they consistently ran up against a variety of stalling tactics; she often claimed to be sick, even texting clients a picture of herself in the hospital, Jenkins wrote.
Martin Chavez met Sandoval through a mutual friend, who recommended her because she paid a higher exchange rate, according to the affidavit. In late 2014, shortly after making a transfer, Chavez received a call from Sandoval, to whom he had never given his number.
Sandoval requested $20,000, saying she wanted to buy pesos because the exchange rate at the time was 20 to 1, well above the normal 13 or 14 to 1 rate, according to the affidavit. When Chavez gave her $5,000 and didn’t see a return, he asked for his money back.
Sandoval told Chavez she had invested the money and that if he waited, he would get a bigger return, Jenkins wrote. Chavez visited Sandoval several times, and each time she told him she did not have the money. He continued contacting her to return his money. At one point she told him she had made $100,000 and that the exchange rate was now 25 to 1.

Chavez never saw his money, Jenkins wrote. He eventually learned that the transfers she made were processed under someone else’s name.

Crispin Cortes had been using Sandoval’s check-cashing service for about a year when Sandoval asked him in early 2015 to invest $100,000 in her peso-purchasing business, promising a 10-percent monthly return for five months, Jenkins wrote. He invested $50,000, a large portion of his savings, and borrowed the rest from his uncle.

Cortes said Sandoval asked him to meet her at various locations to discuss repayment and then failed to show, according to the affidavit. She eventually blocked his phone number. When he confronted Sandoval at her home, she told him she would sell the property she owned in Mexico to pay the debt. Cortes never received his money.

Sandoval’s dealings either began as a Ponzi scheme or eventually devolved into one, according to a brief filed by Bathija. Gonzalez, Sandoval’s attorney, denied that but acknowledged that she was “borrowing from Peter to pay Paul.

“She would take people’s money, make a deposit in Intermex and send the money to Mexico,” Gonzalez said. “But she would stagger the dates to benefit the person who’s sending the money and also to benefit herself, because that way she could pay the person she borrowed money from previously by taking the money from the person who’s bringing the money that day.”

Sandoval’s creditors stopped contacting her when they received letters from a bankruptcy attorney. She filed for bankruptcy on March 30, citing $1,500,000 owed to 58 creditors and $1,200 in assets.


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