For years, the hundreds of victims swindled by former Santa Rosa investment advisor Gary Armitage were told not to hold out hope for restitution.
When the real estate Ponzi scheme that Armitage and partner James Koenig ran for years collapsed, investigators turned up few assets that could be used to offset the estimated $200 million in losses experienced by investors, many of them North Bay seniors who lost their entire savings.
But now that both men have been convicted of fraud and are serving prison time, a little-known state fund for victims of corporate fraud might offer some modest compensation.
State prosecutors are telling the estimated 2,000 victims in the case that some of them may qualify for limited restitution through the Victims of Corporate Fraud Compensation Fund. It is administered by the California Secretary of State's Office.
Victims can recover up to $50,000 each, and only if they qualify under a specific set of circumstances, said Nicole Winger, spokeswoman for the Secretary of State's Office.
“The rules for this one are pretty narrow,” Winger said.
Prosecutors continue to try to work through the Shasta County Superior Court where the men were tried to win restitution orders to help victims make a claim with the fund. A preliminary restitution order was granted for all victims of Koenig's company, Asset Real Estate and Investment of Redding, on Dec. 16.
The order covered investments made in the company's real estate investments, many of them senior care facilities, between June 1, 2000 and June 17, 2008.
Further hearings to establish different classes of victims and to complete individual restitution orders are expected to begin this month, according to an email sent to victims by the state Attorney General's Office.
Paul Montgomery, an 84-year-old retired sheet metal worker from Santa Rosa, invested $50,000 through Armitage in a senior care center in Northridge. He lost $39,000 of it when the center was sold in 2008.