10/07/2011 12:15 pm ET | Updated Dec 07, 2011

Lauren Baumann, Christian Concert Promoter, Pleads Guilty To Ponzi Scheme

Story comes courtesy of California Watch

By Will Evans

The way Downey resident Lauren Baumann tells it, she was putting on Christian rock concerts at a mini-golf fun park and renting a $10,000-a-month historic mansion in order to serve God. And also to pay off a $2.9 million judgment from a 1990s fraud conviction in Texas.

To federal prosecutors, it was just another Ponzi scheme. Baumann, 43, pleaded guilty Monday to wire fraud, admitting that she lured more than two dozen people in Orange and Los Angeles counties to invest in Christian "battle of the bands" contests and real estate deals with false promises. She raised nearly $1 million, and in the end, her investors lost $560,000.

"I am really just hoping there will just be a way to repay everybody," Baumann said. "At the end of the day, God knows my heart. I felt this was what I had to do, is own what I did wrong."

It's a familiar position for Baumann. She pleaded guilty to securities fraud in 1999. At the time, prosecutors and the Securities and Exchange Commission accused her of running a multimillion-dollar pyramid scheme featuring high-profit, low-risk mortgage investments that didn't actually exist.

Bauman served three years in prison. She said she was unfairly blamed for some of it, but admits: "I clearly made mistakes. I was not prudent. There was money from people to pay other people off."

She said it wasn't intentional.

"It's made out to be, 'Oh, she sat down and put together this premeditated scheme.' But, you know, things happen sometimes," she said, comparing what she did with President Barack Obama raising the debt ceiling.

Out of prison, Baumann headed back to her native California and tried to make money in the loan modification business. She said her biggest concern was how to repay her $2.9 million judgment.

She was sued a few times, and the government tried to garnishe her wages. At one point, an investor found an old article online about her Texas problems and extravagant lifestyle, complete with breast implants, luxury cars and a lavish party with live cheetahs. D Magazine in Dallas ran an update in 2008 that made it seem like Baumann was at the end of her run.

But she kept going.

With the idea that she could host religious events, Baumann rented the Rives Mansion, a grandiose 1911 historic landmark in Downey, for about $10,000 per month. She moved in with her three children.

"I am a believer that if you invest in the kingdom ... if you put your time and talents in God's work, to raise up Christian leaders, you'll be prosperous," she said.

Baumann, who also claims she is descended from one of the signers of the Declaration of Independence, said it's in her blood to "raise up future leaders of my country."

At one point, she hosted the contestants of the Miss Downey Pageant for a mansion sleepover with movies, goodie bags and a massage therapist.

"Lauren is a lady who is full of passion," said Gary DeRemer, who runs the beauty contest. "She must have big ideas and not enough money."

Baumann didn't try to hide from her past.

"She said she had some jail time. She said, 'You could Google my name and find out,' " DeRemer said. "She was a very compassionate person, a very loving person, so I overlooked that."

Baumann's loan modification business was hurting from a state law, intended to block fraud, prohibiting advance fees. She said she started to borrow money. She thought she could make it back, she said, from the Christian rock shows.

Baumann kept losing money, so she borrowed more, she said. She admitted in her plea agreement that she used investors' money to pay back previous investors, as well as for the mansion rent, car payments and private school for her children.

Baumann had become active in a local church called Desert Reign Assembly of God. She told people she had past trouble in Texas but won friends quickly, said pastor Don Metcalf.

"Lauren's got this persona of being a good, godly person, and she's very convincing," he said. "She makes it look like she's very successful at things."

Metcalf said he learned later that Baumann was drawing in members of the congregation as investors, including a widow who ended up losing the life insurance money from her husband's death.

"She used the church to gain access to people," Metcalf said. "There's been a lot of people hurt."

At some point last year, Baumann said, she couldn't make it work anymore.

"I just needed to shut it down," she said. "I didn't want to - it just broke my heart."

Baumann moved into a small rental house. Earlier this year, she said, two "very, very nice" FBI agents knocked on her door, looking like movie stars.

"I just told them," she said. "I shared my heart and I shared what happened start to finish."

Baumann is now waiting for a sentencing hearing in December.

"I'm basically taking whatever time God determines I have to continue investing my time and my talents into the kingdom," she said. "I'm still believing there's going to be prosperity."

Will Evans is an investigative reporter for California Watch focusing on money and politics. Find more California Watch stories here.