A Los Osos businessman accused of defrauding investors of more than $2 million pleaded no contest to charges Tuesday and faces up to 10 years in state prison.
Leonard Adolph Delk, 82, who was arrested in 2008, entered his plea to charges of grand theft by embezzlement and unlawful sales of securities.
A no-contest plea results in a conviction without an admission of guilt.
Delk allegedly defrauded 23 people, including many local victims, as part of an illegal investment operation, according to prosecutors.
They alleged Delk sold securities in a Ponzi scheme, paying off existing investors with money from new investors.Delk faces a maximum prison sentence of 19 years and four months.
His sentencing in San Luis Obispo Superior Court by Judge Barry LaBarbera is scheduled for Dec. 7. LaBarbera indicated Tuesday his intention to consider a sentence of up to 10 years.
Delk appeared in court Tuesday morning in a wheelchair while dressed in an orange jumpsuit and wearing handcuffs. Delk told LaBarbera that he understood he was waiving his right to a trial and admitted his wrongdoing.
His attorney, James Royer, said outside court that his client was trying to make money for the investors but got in over his head when the stock market declined.
“He’s not somebody who started off trying to defraud people of money,” Royer said. “The idea was to make money for the investors, and he paid out more than $1 million in interest.”
According to prosecutors, Delk traded the money that people gave him in exchange for a promise of an annual return of 18 to 23 percent, paid at 1.5 percent interest or more monthly.
A Paso Robles woman, Kathy Tumasian, told The Tribune last year that she received a regular check for 11 years through her investment with Delk, but then the monthly payments stopped.
Royer acknowledged that his client also didn’t have the proper licensing or permits to participate in day trading for the investors.Day trading involves buying and selling the same stock on the same day and usually is done quickly and sometimes in high volume.
Delk also is expected to be required to pay restitution for his financial crimes; a specific amount wasn’t settled upon Tuesday.