Prosecutors have launched a criminal investigation into allegations that a Petaluma real estate agent and his wife bilked dozens of local investors out of more than $22 million in loans.

The probe by the Sonoma County District Attorney?s office follows a civil lawsuit filed in late December alleging Aldo and Karen Baccala took money intended as investments in East Coast nursing homes and a Northern California mushroom farm and used it for their own personal gain.

Now, the district attorney?s office is working with the state Attorney General in a criminal investigation of the Baccalas that is ongoing, spokeswoman Christine M. Cook said.

Cook would not release other details of the probe or say if charges would be forthcoming.

?There is a criminal investigation under way,? she said. ?We?re working closely with the Attorney General on that.?

A spokesman for the Attorney General said his office would meet with local prosecutors soon to discuss the case.

Baccala, 68, did not return a call for comment made Tuesday to his business, Baccala Realty Inc. His lawyer, John Harrington MacConaghy of Sonoma, also did not return a call.

In a letter to investors dated Nov. 5, Baccala said he was suspending monthly payments on loans, some of which paid as high as 15 percent interest.

He blamed the credit crunch and the economic downturn coupled with the cost of the debt service, which he said left him without the liquidity to make payments.

Baccala said he would sell assisted living centers and refinance Premier Mushrooms LP in Colusa County to help reduce the debt within the next two years.

?I apologize for this very unfortunate turn of events. Rest assured that I will do whatever I can to maximize your recovery and restore your trust,? Baccala said in the letter.

Some of the 71 investors who sued Baccala in Sonoma County Superior Court on Dec. 23 said they were hopeful prosecutors could determine what happened to their money and if there is any left.

Lou Neve, a Petaluma flower grower who invested $1 million with Baccala, said he?s been trying unsuccessfully to get his money back for more than a year.

His mother, Maria Neve, an 80-year-old stroke victim, had an additional $500,000 invested, his wife Raelene Neve said.

?I?m happy the money trail is going to be investigated so we can find out if there is anything to be recovered,? Neve said. ?A lot of people feel maybe the money wasn?t used the way it was supposed to be.?

Other investors declined to comment.

A case management conference for the civil suit is set for April, said the lenders? attorney, Michael Maloney.

The Baccalas have been sued over investment projects before. In 1989, the couple recruited friends to invest more than $3.2 million to convert an old bourbon distillery into an ethanol production plant.

Investors sued five years later, claiming misrepresentation. Lawyers said the Baccalas told investors the plant was in production when it wasn?t.

The latest suit contains dozens of signed promissory notes going back to the late 1990s detailing payback terms and interest rates. Some are secured by real estate and others are not.

Loans ranged from a few thousand dollars to $2.2 million. They came from doctors and retirees alike, living mostly in Sonoma and Marin counties, but as far away as Illinois.

A story in the Charleston, South Carolina Post and Courier newspaper said Baccala and investors paid $9.3 million in July for 17 acres of land in the town of Mount Pleasant with plans to build a health care rehabilitation center on part of it and sell the rest to other investors.

That story said Baccala?s company has owned Sandpiper Retirement Community, also in Mount Pleasant, since 2004. It includes a nursing home and independent-and assisted-living facilities.

Anyone with information about the case is asked to call district attorney investigators at 565-2011.