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News Release

Thursday, April 19, 2001

Media Relations

Pyramid Scheme Suspects Arrested


Panorama City - On Wednesday, April 18, 2001, Detectives from Financial Crimes Division served a search warrant at the Offices of Luz De Oro, located at 14427 Chase Street in Panorama City. The search warrants were served as part of an investigation of an ongoing financial fraud scheme, commonly referred to as a "Pyramid Scheme." The pyramid scheme in question was run by husband and wife Mercedes Navarrete (53 years-old), and Felix Navarrete (69 years-old) who both reside in Arleta.

The Navarrete's ran a consumer club business scheme called the "Luz De Oro" ("Light of Gold") in which innocent consumers were told that if they joined the club and purchased valuable goods and services, they would receive rewards upon reaching certain monetary goals. In order for members to move upward within the chain and toward the goals, each new member was required to recruit seven additional members and purchase several thousand dollars worth of goods and services from the club at inflated prices.

Among the successful rouses used were the "Automobile Program" and the "Home Program" wherein the member was promised assistance with, up to and including, the purchase of a new car or home for the club member by the club. The promises would be fulfilled when certain purchasing and recruitment goals were met by the club member (victim). In many cases, the victims never received the prizes or access to the products promised (car or home loans) even though the purchasing and recruitment goals had been met. The frauds perpetrated caused members to suffer ruined credit, lost cars and homes, lost down payments, repossessions and other similar economic and emotional distress.

Mercedes Navarrete was previously involved in similar pyramid schemes in the State of Michigan in 1999. La Luz De Oro boasts a membership of 25,000 paying members. Currently, La Luz De Oro presently conducts its meetings in Duarte, California, after moving from the City of Los Angeles. Approximately 3,000 people attended the meeting on April 11, 2001. The meetings are exclusively attended by the Hispanic Community and are conducted in Spanish. The investigation revealed that La Luz De Oro has chapters in Moreno Valley, California, Las Vegas, Nevada, and in the cities of Ensenada and Tijuana, Mexico.

On April 18, 2001, Financial Crimes Division served search warrants at the offices of La Luz De Oro, located at 14427 Chase Street in Panorama City, and at the Navarrete residence in Arleta. Both Mercedes and Felix Navarette were arrested for Grand Theft By False Pretense. They were booked at Van Nuys Jail with the bail set at $50,000 each.

For further information, please contact Detective John Rodriguez, Financial Crimes Division at 213-485-3795.

This press release was prepared by Public Information Officer Eduardo Funes, Media Relations Section 213-485-3586.