Hunting for crazy returns

You'd think that after all we've been through investors might be a little skeptical about 12-15 percent returns. Guess not - Irvine-based Pacific Property Assets defaulted on $500,000 in interest payments not soon after it had been soliciting cash, an investor told the OC Register.

Company officials maintain that they had no idea they were headed for default and bankruptcy at the time they raised $7 million for its Opportunity Fund, which hasn't made any of the intended investments. Brawner said many investors believe that PPA knew it faced default even as it raised cash, although no one has proof that they did. About 70% of the investors are over age 60, [investor Jim] Brawner said. Many depended on the monthly interest check for their daily expenses.

That last part is an important point. Folks dependent on interest income don't want to be stuck with 1 percent yields at the bank. So they're susceptible to high return come-ons. The firm's CEO says there's a very good chance that investors will get their money back if the company can hold onto its assets until the market bounces back.