Lamorinda Real Estate Players At Center Of Massive Fraud, Investors Say

As Orinda homes go it is one of the nicer ones -- seven bedrooms and five-plus bathrooms in Sleepy Hollow, its owner a cornerstone of the community and scion of one of the biggest names in California real estate.

On Tuesday, Carl Blake Miller's $2.2 million residence -- the one Miller and his family would occasionally leave for trips to exotic vacation spots via chartered jet -- will be sold to the highest bidder on the courthouse steps in Martinez.

That is, if a buyer can be found, as there are more loans against the property than its appraised value. With the sale, Miller's once-gilded world appears to be crashing down, his attorney replaced by a public defender; property put up to secure his release from jail rescinded -- the judge hearing his case hinting darkly that he'll be remanded to custody if a property bond fails to add up.

And then there are the civil cases against him, complaints by members of an aggressive investment group Miller allegedly talked into letting him manage their money -- as much as $2 million worth -- while he served as administrator of Geneva Fund Investments in Orinda.

Miller has been free on bail since July of last year, when he entered a plea of not guilty to felony charges that included theft, embezzlement, forgery, and -- at a particularly low point -- taking money from the account of a local Boy Scout troop where he served as treasurer. Miller later returned that money, though the taking remains as a count against him, prosecutors said.

People who placed their money with Miller began to question Miller's spending after he indulged a "lavish" lifestyle that included the trips and enrollment in the best schools for his children.

About a dozen investors eventually came forward to talk with prosecutors, all alleging that Miller had squandered their money -- in several cases the life savings of investors -- in a local scandal many felt had ties to an alphabet soup of real estate lending companies also currently under investigation by state and federal prosecutors.

A class action lawsuit filed in connection with that case alleged that Walter Ng, his sons Barney and Kelly Ng, and Dr. Bruce Horwitz committed a massive fraud -- purported to be among the biggest if not the biggest in state history -- while managing R.E. Loans, B-4 Partners, Mortgage Fund ’08 and Bar-K, Inc. from a less-than-impressive office on Lafayette Circle in Lafayette.

Investigators put the amount of money lost in the scam, described as an outright Ponzi scheme that bilked more than two thousand investors -- at $700 million.

Both the FBI and SEC are at work untangling the complicated maze of bad loans and payouts -- allegedly all made to Ng family members and cohorts as investors went under one by one -- in the summer of 2007.

Investors also noted that Carl Miller worked with the Ngs at Bar-K before leaving to assume leadership of Geneva Fund Investments and that while both "houses of cards" collapsed independently, they have drawn the connection. Both Miller and the Ngs have filed for bankruptcy.

Miller is due back in court March 22.