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Californian Faces Charges in ‘Scratch and Dent” Property Scheme

A $225 million Ponzi scheme involving investments in rehabilitated “scratch and dent” real estate led to fraud and money laundering charges against a California businessman, prosecutors in Los Angeles said.

Bruce Fred Friedman, 60, the owner of Sherman Oaks, California-based Diversified Lending Group Inc., was arrested Sept. 13 in Cannes, France, U.S. Attorney Andre Birotte Jr. said yesterday in a statement. He faces a prison sentence of as long as 360 years if convicted on all 23 counts that he’s charged with, according to the statement.