Criminal probe into Petaluma investment deals

The probe by the Sonoma County District Attorney?s office follows a civil lawsuit filed in late December alleging Aldo and Karen Baccala took money intended as investments in East Coast nursing homes and a Northern California mushroom farm and used it for their own personal gain.

Now, the district attorney?s office is working with the state Attorney General in a criminal investigation of the Baccalas that is ongoing, spokeswoman Christine M. Cook said.

Cook would not release other details of the probe or say if charges would be forthcoming.

?There is a criminal investigation under way,? she said. ?We?re working closely with the Attorney General on that.?

A spokesman for the Attorney General said his office would meet with local prosecutors soon to discuss the case.

Baccala, 68, did not return a call for comment made Tuesday to his business, Baccala Realty Inc. His lawyer, John Harrington MacConaghy of Sonoma, also did not return a call.

In a letter to investors dated Nov. 5, Baccala said he was suspending monthly payments on loans, some of which paid as high as 15 percent interest.

He blamed the credit crunch and the economic downturn coupled with the cost of the debt service, which he said left him without the liquidity to make payments.

Baccala said he would sell assisted living centers and refinance Premier Mushrooms LP in Colusa County to help reduce the debt within the next two years.

?I apologize for this very unfortunate turn of events. Rest assured that I will do whatever I can to maximize your recovery and restore your trust,? Baccala said in the letter.

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