The first of many elderly investors who claim to have lost a combined $20 million in what Sonoma County prosecutors are calling a vast Ponzi scheme testified Friday they gambled their life savings on word-of-mouth recommendations and the promise of 12 percent returns.
Some, like Hyam Liebling, 86, of Oakmont in Santa Rosa, testified they plunked down their money with Aldo Baccala, 71, of Petaluma, despite being unclear about who he was and how the money was secured.
"I just trusted the guy," said Liebling, who walked to the witness stand with the help of a cane. "And I trusted the information I got from a friend who invested in him for many years."
After a brief meeting with Baccala in 2008, Liebling said he wrote him a check for $30,000, eager to begin collecting generous monthly interest payments. A few weeks later, he shelled out $25,000 more, increasing his total investment to $55,000, he said.
The money was going into mobile homes owned by Baccala's Petaluma real estate company and later, assisted living centers, he said.
But in November 2008, Liebling testified the monthly payments stopped. He received a letter from Baccala telling him he'd run out of money.
Liebling and other investors sued Baccala in civil court but have since received nothing, despite a settlement promising repayment.
Asked about the impact on his life, the elderly man said, "Well, we're retired."
Liebling was the first to testify in a preliminary hearing expected to continue next week. Prosecutors said there are 55 victims, many of them elderly, who were cheated out of their money.
Baccala, who was arrested in June, listened to their stories from the defense table. He's charged with 164 felonies including grand theft, securities fraud and elder financial abuse. If convicted, he faces life behind bars.