Two men end up duping their friends into real estate Ponzi scheme

MILWAUKEE (WITI) -- You trust your friends -- but a lot of other people did the same, and ended up losing money in a real estate deal.

"I was disappointed, I was disillusioned, I was in disbelief. It was like 'No, no. This isn't so. These are good people," fraud victim Shirley Lee said.

Lee invested her retirement savings with lifelong friends.

"The prosecutor's office called and wanted to talk about my investments," Lee said.

Lee found out her money was gone! She and 91 others had been duped in a $92 million Ponzi scheme.

"I never thought in a million years that these people would lie to me, and I think that hurt more than anything -- that I was lied to and I wasn't discerning enough to know I was lied to," Lee said.

"These people" are James Powell and David Calwell.

"A lot of people invested with these two gentleman because they knew them for a long time in the community and church," U.S. Postal Inspector Alejandro Almaguer said.

Victims were told their money was being invested in real estate.

"Ultimately what happened, some property was purchased. It went into disrepair, but never was all the money put into these properties. Instead, the money went into bank accounts and Calwell and Powell used them as their piggy banks," Almaguer said.

Postal inspectors say both men spent the money on their families, vacations and elaborate home remodeling.

"Calwell lived in a small farmhouse and poured in hundreds of thousands to renovate the farmhouse. He had an indoor swimming pool. He had a barn with custom made stables for horses," Almaguer said.

Lee is left with one nagging question.

"What would make you do that to somebody like this to people who trust you? What was their mindset? I kind of want to know why and hear 'I'm sorry,'" Lee said.

The Ponzi scheme collapsed when Powell and Calwell weren't getting new investors.

Calwell passed away before the trial began. Powell pleaded guilty to mail fraud and was sentenced to 10 years in federal prison.

Some advice from Postal Inspectors: Do not trust someone just because he or she is a friend or part of your community. When it comes to investing your money -- always do your due diligence, no matter who you are dealing with.