A judge signaled her doubt Friday about prosecutors' ability to prove all 164 charges against a Petaluma real estate agent accused of bilking more than 50 investors out of $20 million.

Judge Shelly Averill said it will be difficult to sort out which money collected by defendant Aldo Baccala from 2004 to 2008 was rolled into legitimate projects and which was used to pay off other investors in a vast Ponzi scheme.

At the conclusion of lengthy preliminary hearing about Baccala's convoluted business dealings, Averill seemed to suggest some of the money may not be traceable.

"Clearly this is a huge proof problem at trial," she said.

Still, Averill said she had "done the math" and would be prepared to rule on the matter Tuesday.

Baccala, 72, is suspected of running one of the biggest Ponzi schemes in Sonoma County history, tapping into the life savings of friends and retired people who invested from $25,000 to $2 million on the promise of double-digit returns.

Prosecutors said he raised millions for a nursing home venture in the Carolinas, a Nevada car wash and a mushroom farm in Colusa, but directed the investments to someplace else.

The scheme started to unravel when he lost about $8 million in the stock market. To compensate, he took on new investors, promising returns up to 27.5 percent, said Ronald Smetana, a senior prosecutor for the state Attorney General's Office.

Smetana said that's when Baccala got on a "treadmill" in which he was paying off old investors with new money, in violation of state laws.

"The only way for Mr. Baccala to stay on that treadmill was to bring in more money," he said.

Baccala went broke in 2008 and sent out a letter announcing he would no longer make interest payments.

Investors sued, winning a $21 million settlement the following year. None of the money has been repaid.

A criminal investigation was launched and Baccala was arrested in June 2012. He was charged with multiple counts of grand theft, securities fraud and elder financial abuse in a long complaint that names each investor. He remains in jail in lieu of $2 million bail.

He faces life in prison if convicted.

Preliminary hearing testimony began last fall to determine whether there was sufficient evidence for a jury trial. Fifteen investors took the stand, recounting how they met Baccala and handed over checks, largely on word-of-mouth recommendations. Many said the ordeal drove them to bankruptcy.

Prosecutors summed it up Friday, arguing Baccala lied about how the investments were secured and failed to disclose his precarious financial situation but continued to take money, sometimes convincing people to refinance their homes.

Baccala's lawyer denied any attempt to defraud, accusing investors of getting into a risky deal.

Attorney Steve Gallenson said many came "begging" to give him money. He also argued too much time had passed in some instances for criminal charges.

"There are so many who just willy-nilly came in and plunked down their money and said 'Give me my 12 percent,'" Gallenson said.

(You can reach Staff Writer Paul Payne at 568-5312 or paul.payne@pressdemocrat.com.)