Attorney General Bonta Announces Arrests and Arraignment in $1 Million Pizza Franchise Scam

OAKLAND – California Attorney General Rob Bonta today announced the arrest and arraignment of two defendants for a complex fraud scheme, in which the defendants allegedly defrauded victims of more than $1 million in investments into franchises or stock options for a company offering pizza restaurant franchises. The defendants were recently arraigned in San Diego Superior Court on felony charges including eleven counts of Franchise Fraud in violation of California Corporations Code, nine counts of Security Fraud, one count of Fraudulent Securities Scheme, and two counts of Grand Theft and a special allegation of aggravated white-collar crimes with losses over $500,000.

“The white-collar crime scheme perpetrated by these defendants stole money from Californians who were attempting to become entrepreneurs or make investments into business. At the California Department of Justice, we won’t stand idly by if individuals cause financial harm to hardworking Californians to enrich themselves,” said Attorney General Bonta. “My office will continue to fight to hold bad actors accountable, and protect Californians’ pocketbooks.”

Between 2020 and 2023, the two defendants solicited and received money from investors who believed they were either purchasing public stock options or franchises of a pizza restaurant chain. The scheme victimized many individuals with little to no business investment experience, leading victims to believe they were becoming legitimate business owners or stockholders, including some victims who were over the age of 65, and two military veterans. The financial commitment of the victims ranged from $5,000 to $150,000 and the defendants secured nearly $1 million in funds from their victims. Within months of receiving funds from victims, the defendants began closing off communications with them, and ultimately stopped all communication. After the COVID-19 pandemic, one of the defendants also obtained multiple loans aimed to assist small businesses post pandemic, totaling $287,000. These loans were never paid back.

Following a lengthy investigation by the California Department of Justice’s Special Prosecution Section (SPS) Investigators and the Bureau of Investigations (BI) White Collar Investigations Team (WCIT), the defendants were arrested and extradited from Florida with the assistance of the Osceola County Sheriff’s Office and United States Marshals Service.

It is important to note that a criminal complaint contains charges that must be proven in a court of law. Every defendant is presumed innocent until proven guilty.

A copy of the complaint is available here.