Foreclosure investment operator out on bail

March 10, 2008 2:06:26 PM PDT
The operator of a real estate investment program has been released on bail.

Action News first introduced you to Frank and Janice Varallo in October. They told us then they had lost 18-thousand dollars of their life savings by investing in Gaddel Enterprises.

They said Gaddel promised to invest their money into foreclosed properties and help them make tens of thousands of dollars in profit but that sort of profit never materialized.

On Monday the alleged founder and head of the company, Liz Morice, pleaded not guilty in federal court and was released on 50-thousand dollars bail.

She is charged with mail fraud, money laundering and aiding and abetting.

The federal indictment also includes a 6-million dollar notice of forfeiture which means consumers could get some money back.

Meantime, Morice's parents told Action News Monday they thought Morice was only the company's office manager.

A trial date for Morice has not been set.

Filed March 7, 2008

Lizette Morice operated the program that Action News warned you about called Gaddel Enterprises. Morice is now officially charged with devising a scheme to make money by defrauding consumers.

Frank and Janice Varallo say Gaddel Enterprises Inc. promised to invest their money into foreclosed properties and turn each thousand dollar investment into tens of thousands of dollars in profit.

"I'll never, ever do anything like this again. It was terrible," said Frank Varallo.

Because by investing in Gaddel, Frank lost about 18-thousand dollars of the Varallos retirement savings.

A federal grand jury charges that the founder and head of Gaddel, Morice, took money knowing full well that no real estate transactions were ever completed by her company.

"I'm 64-years-old and I'm starting all over again. That's a tough way to go," said Janice Varallo. "They defrauded the public. They should be put in jail and should be made to make restitution."

Law enforcement is one step closer to making that a reality. Federal authorities have arrested Morice.

She faces 7 counts of mail fraud and 7 counts of promotional money laundering.

The indictment also includes a notice of forfeiture, which means consumers could get some money back.

"Basically, we believe there was a six-million dollar loss that she was able to get from consumers through this scheme. If we're able to recover any of that money, we hope to share it with all victims we are able to identify in this case," said postal inspector Oriey Glenn.

Morice will remain behind bars until at least Monday when she's scheduled for a bail hearing.