Special Reports

ALHAMBRA, Calif. (CBS) ― Fears of another Bernie Madoff Ponzi Scheme have dozens of Southern California investors worried about their money -- $70 million missing.
And investors…many retirees, worry their money may be gone. CBS 2 investigative reporter David Goldstein has the exclusive story.

Joe and Danielle Duran thought they were financially secure for retirement.

Now they fear they were swindled out of their life savings in what they believe is a multi-million Ponzi scheme allegedly run by this man--Gerald Berke.

Joe Duran: "He was a fraud."

David Goldstein: "And he conned you?"

Joe Duran: "Yes he conned me. My life savings."

The Duran's invested 1.6 million dollars with Berke--who ran GJB Enterprises.

After five years of good returns in what's called factoring--the buying and selling of factory invoices--- the office is now closed.

They fear their money is gone.

Joe Duran: "I've got to go back to work or I'm going to lose my house. I've got to find a job and at my age and with a tight job market I'm sweating."

And they're not alone.

David Goldstein: "Does everyone here fear they're never going to see their money again?"

Group: "Yes. Yes."

Garth Ryan put in $150,000.

Garth Ryan: "It's my life's nut. It's all I got."

90-year-old Don Willock--$200,000.

David Goldstein: "What does $200,000 mean to you at 90?"

Don Willock: ":Alot. A hell of alot."

His face shows the pain. Everyone fearing the same thing.

David Goldstein: "Do you fear this is another Bernie Madoff?"

Mason Wang: "I do fear this is another Bernie Madoff. A West Coast version."

The New York Madoff was convicted of operating a 65 billion dollar Ponzi scheme.

Perhaps the largest ever.

No charges have been filed against Berke---but GJB also had some big bucks invested.

According to court documents from a lawsuit ---it's estimated GJB had 70-million dollars in funds from 400 investors.

So far less than a million dollars has been accounted for.

Stan Salmore: "I thought he was completely legitimate. He knew the game. The checks came in no problem."

No problem until February when the checks stopped.

And Berke was unreachable.

Garth Ryan: "Everything's pointing to a Ponzi scheme."

According to court records and testimony Berke is in his 70's.

Suffering from lung cancer and undergoing chemotherapy.

Over the years he's kept a low profile.

He lives behind the gates of this condo complex in Century City.

According to public records it's two bedroom, four bath, nearly 3,000 square feet estimated to be worth $1.7 million.

Public records also show he owns at least one home in Palm Springs.

Investor John Emanuel spoke on the phone with Berke in February and says he blamed any business problems on his poor health.

John Emanuel: "He told me he had terminal cancer and the doctors told him he had six months or a year to live."

But since then a receiver was appointed by the courts to try and find out what was going on behind these doors.

So far records are incomplete.

But they've found no evidence of investor funds utilized in a factoring business.

Berke has refused to turn over some computer records-- asserting his fifth amendment right.

Joe Duran: "He's hiding something. If he had nothing to hide why wouldn't he turn over bank statement and cooperate."

David Goldstein: "Do you see any red flags here?"

Andy Couch: "Oh there are an abundance of red flags."

But even with all the red flags--attorney Andy Couch--who filed the lawsuit for an investment fund that sank 11 1/2 million dollars into GJB---isn't ready to admit his clients were swindled.

David Goldstein: "I guess the big question in everyone's mind is--was this a Ponzi scheme?"

Andy Couch: "Right now we don't know if it was a Ponzi scheme or not."

Berke's attorneys haven't responded to our phone calls.

We've confirmed state and federal regulators are now looking into the company.

And investors want criminal charges filed.

Joe Duran: "Jerry should go to jail. I don't care how old he is or how sick he is. He has defrauded alot of people out of their life savings. Elderly people who probably can't make it up."

People like Joe and Danielle -- who saved all their lives -- and now have to practically start over.

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