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Roseville man sentenced to five years for Ponzi scheme

Royce Newcomb pleaded guilty to a real estate fraud
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A Roseville man was sentenced Thursday to five years and 10 months in prison after pleading guilty to a $2.9 million real estate fraud scheme. According to court documents from January 2009 to February 2010, Royce Lee Newcomb, 49, solicited 22 investors to purchase real estate, primarily foreclosed homes, according to a news release from the U.S. Department of Justice. He instructed them to send their money to Contour Escrow Services that was operated by co-schemer Barry Winnett, who had no license to perform these services. In total, investors transferred $2,975,352 into Contour Escrow Services, thinking that Newcomb was using it to invest in real estate. In his plea agreement, Newcomb admitted that at his direction or with his knowledge, Winnett disbursed at least $564,241 to Newcomb, $160,458 to himself and the remainder to earlier investors. Newcomb falsely represented to victims that these disbursements were returns on investment when he knew they were derived from monies transferred to Contour Escrow Services from later victims, according to the release. At Newcomb’s direction, Winnett also created false documents to assure victims that more than $1 million was held by Contour Escrow Services, when, in fact, Contour Escrow Services had virtually no money. Newcomb also violated bankruptcy law. He marketed himself as offering foreclosure “rescue” services through Paradigm Foreclosure Specialists, which he registered by using his middle name as his surname. He solicited individuals to pay him between $1,300 and $3,800 to avoid or delay the foreclosure process by filing serial bankruptcy petitions without supporting documentation. In one case, Newcomb accepted a woman’s wedding ring, valued at $5,000, in lieu of payment. Through associates and friends, he filed the bankruptcy petitions on behalf of individuals, on occasion without the knowledge of the person. Newcomb had previously been sanctioned by the United States Trustee for similar abuse of the bankruptcy process, making him aware that the filings violated bankruptcy law. ~ Staff report