Catch Me If You Can 

After losing big to a Filipina swindler posing as a travel agent, her East Bay compatriots took matters into their own hands.

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This is what's known as a Ponzi scheme, and what makes it illegal is that little or no real commerce is taking place -- the money is simply shunted around in such a way that most, if not all, of the investors will lose their shirts. Using the new investors' cash, the swindler makes modest payouts to prior investors, keeping them in the game; the con artist, meanwhile, takes a substantial cut. It's the sort of white-collar crime the Internal Revenue Service investigates when it's not auditing people's taxes. In fact, at just about the same time Soledad was driving Beredo around looking for a church, the agency's Criminal Investigations Unit had quietly begun looking into Beredo's activities.

The feds eventually estimated that Beredo had bilked her victims, mostly East Bay Filipinos, out of $3.1 million, a conservative estimate based on the losses of 27 people the IRS agents used to build their case. But the Fremont police, California Attorney General's office, and state's bankruptcy courts documented dozens of additional complaints from Beredo's targets, some of whom had sold or refinanced their homes, cashed out their stocks, emptied their retirement plans, or depleted their children's college funds in order to invest.

Official inquiries, however, move at a snail's pace. When the authorities were slow to respond, the frustrated investors began to find one another and launch investigations of their own. Individually and in small groups, they chipped away at Beredo's complicated web of financial transactions. Sometimes the sleuthing led to dead ends or left them accusing each another of complicity. But it was ultimately their efforts that got law enforcement agencies to take the case seriously. In the process, they uncovered evidence that would be instrumental in putting their nemesis behind bars. In the end, the very bonds that Beredo exploited to make her con a success would lead to her undoing.

Mankinen was among the first to take a hard look at Beredo's activities. He started investing in 1998, and for a time things seemed to be going well. "She was paying what she promised," the engineer recalls. "At first it was 20 percent returns, then it was 10 percent." He and his wife invested at a feverish pace, together giving Beredo more than $200,000 in just a few months. "I was really getting carried away," he says, flipping through a stack of Beredo's worthless promissory notes.

But some things about Beredo and her business didn't smell right. For instance, Mankinen could never cash her checks without approval from a certain bank teller. Then a few checks bounced. After that, he says, "She would meet us in the parking lot to pay us cash. You'd see a stack of $100 bills. She had a purse full of them -- she must have had ten or twenty grand in her purse all the time." Sometimes Beredo would offer to reinvest Mankinen's profits. She wouldn't hand over a dime, but it left him with the impression that he was making money.

The breaking point came after a party at which Beredo introduced Mankinen to her husband, Edgar Beredo, saying that he was an engineer for General Motors. "I tried to talk engineer talk to him and it was clear he was not an engineer," Mankinen says. "He didn't have any technical knowledge at all. Zero." The encounter left him deeply suspicious. He decided to stop investing and asked for his principal back. Initially, Beredo agreed. But each month she would fail to pay, and would lower the interest rate. "She signed an agreement for monthly payments, but she kept rewriting it, until we were down to zero percent. I said, 'Okay, just give me my money back. I'll be happy to break even,'" he recalls.

As 1999 dragged on, Mankinen launched a one-man investigation. He started with the luxury cars Beredo drove. He ran a license-plate check and discovered they were all rented. He also found that she was listed at a half-dozen addresses. He wrote to the owners of LG Travel complaining about her tactics, which he claims led to her being given the boot. He printed up "wanted" posters accusing Beredo of fraud. And he got the records for his brother-in-law's credit cards, which Beredo had been authorized to use to buy plane tickets -- instead she'd racked up expenses at beauty salons, clothing stores, luxury hotels, flower shops, fitness centers, and voice coaches.

Finally, Mankinen took his case to the courts. He hired an attorney to represent himself and five family members who had lost a total of $430,000. During the discovery process, Mankinen subpoenaed some of Beredo's bank records and discovered something that made him wonder if she had an inside accomplice: Her account information contained no Social Security or driver's license number, and no dates. During the time Mankinen had been her investor, she'd written checks to people he would later come to recognize as fellow victims, as well as to her husband, one of her boyfriends, and herself. "If you look at the bank records, you can see the day she got a check from me she took it to the bank and wrote checks against it," he says. "There was no check clearing or anything." He correctly surmised that Beredo was paying out small amounts to her investors to hold them off. "In the meantime, she's bleeding the account for about five to ten grand a week," he says.

But the civil suit ultimately went nowhere. Beredo failed to show up for many court appearances, and although the judge ordered her to pay back the $430,000 plus $500,000 in damages, she never did. Mankinen would later share his information with government investigators and fellow victims. But for now, there was little he could do but return to work and try to earn his savings back.

In the grand scope of Patricia Beredo's activities, Caroline Carrion was small fry. The Hayward accountant, who had met Beredo while buying a plane ticket in 2000, had invested only $10,000. But unlike Soledad, Carrion didn't keep her loss a secret. "When I want something done, I'm just basically a go-getter," she says. "I'm focused. I felt that she shouldn't be able to get away with this."

After Beredo failed to repay her, Carrion took her case to the Fremont police, as others had before her. The investigators duly recorded the complaint, but claimed they didn't have enough evidence to make an arrest. Many potential fraud cases are stymied by the difficulty of drawing a clear line between a legitimate investment that went bad and a genuine scam -- investigators need to show deliberate malfeasance to get the district attorney's office to prosecute. "It was a dead end," Carrion remembers. "The police couldn't move forward because you need proof."

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