John J. Packard of Long Beach pleaded guilty today at the Central Justice Center in Santa Ana in an alleged $110M property Ponzi scheme that included mail fraud.

Packard, 64, and co-defendant Michael J. Stewart, 67, of Phoenix, were named in a 16-count grand jury indictment in Sepember 2012, charging them with mail and bank fraud, fraudulent concealment and transfer of bankruptcy assets.

According to the court, Packard and Stewart co-founded and ran Pacific Property Assets, a company that bought property, renovated it then managed it as rental property. Over the course of 10 years, the company acquired more than 100 properties. The two men ran the company from 1999 to June 26, 2009, when they filed for bankruptcy. This led them to owing 647 investors about $91M and banks about $100M. Investors got nothing, and the banks lost about $24M, according to federal prosecutors.

Pacific Property Assets’ rental revenue began tailing off in 2002, and it was unable to cover its operating costs, according to the indictment. The company then turned to property sales, refinancing and new investor loans to keep itself afloat.

From 2002 to 2007, Packard and Stewart paid themselves between $400K and $660K per year, and gave themselves a pay raise of about $750K, from 2008 to June 2009, despite the company’s ailing finances.

They each also received more than $3M in additional net payments, the indictment alleges.

The two men lied about the company’s financial health in 2007 while seeking new investors to keep the business afloat from 2008 to January 2010, according to the indictment.

The company’s “net income had been increasingly negative since at least 2004, resulting in a net loss of over $13M in 2007,” the indictment alleges. “While PPA had previously been able to maintain a positive cash flow by continuing to borrow money from banks, the market declines made this more difficult.”

Packard and Stewart were also accused of lying to a lender, Vineyard Bank, to get loans and to maintain its line of credit.

Packard is scheduled to be sentenced May 18 with a maximum term of 20 years. The actual sentence, however, is expected to be worked out later, based on recommendations from probation officers and prosecutors. Stewart is scheduled for trial in April.

City News Service contributed to this report.