Sept. 15--Until 2008, Lee Loomis and his associates were living as successful businessmen, driving Cadillac Escalades and Hummers and impressing investors with their work ethic and Christian beliefs.

Loomis, 55, had moved from Chicago to California and set up shop first in Chico, then Roseville. He had a $1.9 million home in Granite Bay that featured four bedrooms and six bathrooms. He earned $400,000 a year showing families nationwide how they could use the equity in their homes or the cash in their college funds and 401(k)s to invest in what he termed safe and lucrative plans that would set them up for life.

It was, he claimed, "simply the best financial plan ever created."

Except, federal prosecutors say, it was all part of a massive lie, one of the largest Ponzi schemes in the history of the region, one that may have cost investors in six states as much as $100 million.

On Friday, following a four-year investigation, FBI agents went to Loomis' Roseville apartment -- his mansion was lost long ago to foreclosure -- and arrested him.

A 50-count indictment unsealed shortly after in U.S. District Court in Sacramento charges Loomis and his father-in-law, John Hagener, 76. Mail fraud is charged in 19 counts and wire fraud in 31. Five Loomis associates also are named as defendants.

"It's about time," David Teja, who invested with Loomis, said upon learning of the indictment. "I hope he serves a significant prison sentence."

After meeting with Loomis, Teja and his wife, Deborah, took $150,000 of the equity in their Chico home and turned it over to Loomis Wealth Solutions. The couple have a civil damage lawsuit against Loomis scheduled for trial in July in Butte Superior Court.

"One way or another, I hope we can get some of our money back," Teja said. "That would be an answer to many prayers.

"I would like to testify at the (criminal) trial as a witness for the prosecution," he added. "I know a lot of people who would."

The saga has played out for years amid a convoluted maze of securities instruments, phony mortgage documents, insurance policies and businesses that comprised the multimillion-dollar empire Loomis ran under the umbrella of Loomis Wealth Solutions, an entity now defunct but prominently featured on websites such as www.scam.com and www.ripoffreport.com.

Over time, the investigation of Loomis, his associates and network of businesses has led to the prosecution of numerous people, not just on fraud charges but crimes ranging from a civil rights violation to marijuana cultivation.

The alleged fraud was so complex that federal agents and prosecutors took years before they were ready to seek an indictment, and the cast of characters that Loomis surrounded himself with were worthy of a screenplay.

One was a white supremacist, another a lifelong con man who fled the country and was eventually arrested coming in from Canada with $70,000 crammed in his cowboy boots.

All told, four suspects fled the country as prosecutors closed in, including one hiding in Spain who had the con man ship him by Federal Express $20,000 stuffed in a Pringles potato-chips can. Only one remains overseas, still the target of prosecutors, and on Friday their alleged ringleader made his first appearance in federal court.

Loomis, who claims he is without money to hire a lawyer, was represented by Assistant Federal Defender Douglas Beevers. He entered a plea of not guilty and was ordered held without bail as a flight risk.

The highlight of the hearing was when Assistant U.S. Attorney Russell Carlberg, who has guided the case to indictment, revealed Hagener has been cooperating with the government and is expected to testify against his son-in-law if need be.

"Mr. Hagener realizes the situation," Carlberg told U.S. Magistrate Judge Kendall J. Newman. "Mr. Loomis doesn't get it. He's in denial."

Hagener, who is represented by prominent defense lawyer William Portanova, also pleaded not guilty. Newman ordered him released on a $1 million unsecured bond signed by him and his wife, Maria. The judge directed Portanova to work with his client in arranging for property to collateralize Hagener's release.

Also charged in the case are Darren Fehst, a 44-year-old Canadian; Michael Llamas, 27, of Tracy; Peter Woodard, 54, of Ventura; Joseph A. Gekko, 43, of Yorba Linda; and Dawn C. Powers, a 42-year-old Lincoln woman.

The scheme laid out by prosecutors was rooted in trust:

Potential investors were invited to two-day seminars at hotels or casinos where Loomis would spin his tales of wealth to educated professionals with good credit scores and an appetite for the 12 percent return on investment Loomis promised.

He offered three plans, depending upon the size of the investor's bank account, and offered to act as their financial adviser without charge.

Depending on the investor, Loomis would offer life insurance policies, investments in a "special" $10 million fund or, for the select "Tier 3 investors," the opportunity to invest in homes and condominiums that Loomis selected for them in California, Florida, Arizona, Colorado, Nevada and Illinois.

Tier 3 investors were lured with a sweet deal. Loomis would pay the mortgages, taxes and insurance and rent out the homes; investors would get at least a $300-a-month return.

Business was good in the go-go days of the housing boom. Regular statements would arrive in the mail showing how much each investor was earning.

Then the crash came in 2008, and the good times were over. Prosecutors say Loomis and his associates tried to keep paying investors by reeling in new ones, and that as they got desperate, they turned to brazen tactics, forging names of buyers on home contracts and inflating income statements.

According to prosecutors, the "special" $10 million fund that kept showing up on some investors' statements actually had only $200,000 by the time agents shut down Loomis' operations in 2009.

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