U.S. Attorney McGregor W. Scott announced Monday that a former Modesto businessman pleaded guilty to one count of mail fraud relating to the sales of fraudulent high-yield investments.
According to authorities, John Michael Pappas, 45, admitted that from 1998 to 2002 he defrauded investors by selling them securities that promised high rates of return with little risk.
Many investors lost their life savings and retirement. As part of the plea agreement, Pappas said that investors lost from $2.5 million to $7 million, that he had more than 50 victims and that he violated a previous order not to sell unregistered securities.
Pappas operated from offices in Modesto and Fresno using business names including Pappas Worldwide Inc. and Pappas Electronics LLC. He faces up to five years in prison and is scheduled to be sentenced Dec. 15. The FBI and the Internal Revenue Service carried out the investigation together.