The Region : Man Guilty of Mail Fraud

A participant in a Ponzi scheme accused of defrauding hundreds of investors out of $3 million to $5 million was convicted in Los Angeles Federal Court on 20 counts of mail fraud. Asst. U.S. Atty. Ronald J. Nessim said Harold Mote Pruett, 47, who maintains residences both in West Hollywood and Santa Barbara County, operated the scheme between 1979-81 with his mother, Gertrude M. Pruett, who was not tried and is still a fugitive. According to Nessim, the Pruetts offered investors annual returns of 40% on investments in a mill that supplied carpets to large-scale builders at purported profits of up to 60%. Like most Ponzi schemes, early investors received the promised return on their money and were encouraged to invite friends to join in investing with the mother and son team, Nessim said. Eventually, the scheme collapsed, the Pruetts disappeared, and the FBI stepped in.