'I don't know what I'm going to do'

In the 1990s, Pat Brown lived across the street from Gary and Nell Armitage in the Alexander Valley.

After the death of her husband, a project manager with a construction company, Brown received a lump sum from his pension.

Not long after, her neighbor Gary Armitage came calling.

"I have a feeling he thought, 'Oh, there's some money there,' " Brown said.

Armitage recommended she sell a rental house in the East Bay and invest the proceeds, but she wasn't interested.

But in 1999, she agreed to turn over $150,000, her life savings, largely on his assurances that her investments with AREI were perfectly safe.

"He said he was on the board and would keep a close eye on it to make sure nothing happened," Brown recalled.

She made it perfectly clear to Armitage that she couldn't afford to have her principal facing any risk.

"I told him, 'This is all the money I've got. I'm too old to get any more,' " the 79-year-old Brown recalled.

Armitage assured her that all was well, even when there were clear signs that was far from the case.

Brown had two life insurance policies through Armitage, but he let the premiums lapse, she said. When she showed him a letter indicating that she owed $6,000 in premiums on the policies, he told her not to worry.

"He said 'Forget it Pat. Just ignore it. I'll talk to them,' " Brown recalled. The policies were later canceled for failure to pay the premiums, she said.

She now fears the remainder of her investment is gone.

While she succeeded in pulling about $45,000 out of her initial investment, she believes the remaining $105,000 was rolled out of investments in senior centers and into corporate notes in AREI.

Aware the Redding company closed in June, Brown said she worries the notes are now worthless.

"I don't know what I'm going to do," she said.

-- Kevin McCallum