http://news.yahoo.com/news?tmpl=story&u=/ap/20040525/ap_on_bi_ge/frozen_funds_1 SEC: Alleged Ponzi Scam Raised $17 Million Mon May 24, 8:25 PM ET By MICHAEL LIEDTKE, AP Business Writer SAN FRANCISCO - An alleged real estate scam engineered by a mother-and-son team raised $16.8 million from about 450 investors before disintegrating into a financial shambles with less than $1 million in assets, investigators told a federal judge Monday. Lawyers for the Securities and Exchange Commission (news - web sites) and a receiver overseeing the remains of Reno, Nev.-based Chicago D&P Inc., drew the grim picture during a court hearing attended by about 20 of the investors who were lured by the promise of rich returns. The magnitude of the potential losses is larger than court documents had previously suggested in a civil lawsuit filed earlier this month against Chicago D&P founder Pat Morgen and her son, Shalom Gibson. In its initial complaint, the SEC alleged Morgen and Gibson had bilked about $6.4 million from at least 200 people by running a "Ponzi" scheme â an operation that illegally diverts money from one investor to pay another. Neither Morgen nor Gibson have appeared in court since the SEC filed its lawsuit and neither has hired an attorney. The investors who attended Monday's hearing said Morgen hasn't been in contact with them since May 9. An Associated Press call to her cell phone was answered by a message saying she was on a "Mother's Day" retreat. The SEC has been unable to find Gibson. The SEC alleges Morgen and Gibson swindled investors to pay for their own luxurious lifestyles. The SEC believes Morgen and Gibson collected much of the money from military families and church groups. The SEC's lawsuit prompted U.S. District Judge Charles Breyer to appoint an attorney, Stephen E. Anderson, who has spent much of the past two weeks getting a handle on Chicago D&P's activities and assets. Anderson's preliminary findings haven't been encouraging, his attorney, Jamie Dupree, told Breyer on Monday. Chicago D&P has somewhere between $700,000 and $800,000 in two bank accounts and a tangled web of Nevada real estate holdings with unclear titles of ownership, Dupree said. The investments include the Little Lambs child care center in Sparks, Nev. Other assets seized include two limousines and a sports utility vehicle. The remaining cash and property "does not support payments to the investors," Dupree said.