Financial fraud often revolves around personal trust, and Bakersfield Investment Club founder Daniel Raymond Nase III came off as earnest, if a tad bold, to many of his investors.

Inside a small office building across Stockdale Highway from Cal State Bakersfield, at club meetings attendees say took on a churchlike atmosphere, the baby-faced military veteran appeared committed to helping people make money in real estate, online business loans, solar panels, and local oil and gas production.

Nase, now 40, a former Kern County staff appraiser, also displayed an audacious side. In line with his promises of annual financial returns between 15 percent and 33 percent, he wore and gave away light-blue Nike baseball caps emblazoned with the letters “Mr. 21%,” an enviable level of return for any fund manager.

Such confidence turned off some people but endeared others.

“He struck me as a humble guy who was just sticking to a strategy,” said career investor Brian Steele, who put six figures into the club. Other investors contributed far less. Some reportedly gambled their retirement savings.

Faith in Nase persists among some club members even as they face the prospect later this month of getting back just 31 cents on the dollar for the $11.4 million likely owed to 236 BIC investors.

Things turned south after federal investigators intervened in 2016, leading to the club being shut down and its assets seized in what amounts to Bakersfield’s biggest financial fraud case since the Crisp & Cole real estate scheme cost lenders at least $20 million after the 2006-07 housing bust.


Several investors interviewed by The Californian expressed doubt Nase ever meant to do wrong. They blame the government — the U.S. Securities and Exchange Commission — for interfering with what had been a steady source of income, and a court-appointed receiver who they contend has drained their dwindling investment during the last 2½ years.

Steele, manager of a Sacramento-area investment fund, emphasized he had been “made whole” when, in January 2016, Nase distributed assets that gave Steele and others full title or fractional interest in properties equal in value to their investments. The distribution was later reversed by the receiver.

Steele was less critical of Nase than he was of how long the receiver has taken to resolve the case.

“Did (Nase) have the best accounting practices? No,” he said. “Could there have been some accounting errors or some bookkeeping errors? Possibly.”


The SEC alleges harm done by Nase resulted from more than just mistakes. Last year, commission lawyers persuaded a federal judge to hold him liable for more than $12 million in penalties, plus roughly the same amount in ill-gotten gains related to his involvement with the club. The latter sum will be reduced by the upcoming distribution to investors.

Nase consented to the ruling without admitting or denying guilt. He agreed not to challenge SEC allegations he had misappropriated millions of dollars by improperly crediting himself with having contributed assets that actually belonged to the club, among other alleged financial improprieties.


Court records suggest the operation was unsustainable.

Nase represented at the time the club’s assets were frozen the club was bringing in $56,000 per month in rental income and clearing about $30,000 per month. But the receiver painted a very different picture.

With some tenants not paying rent and day-to-day operations generally a mess, the receiver reported the club was actually bringing in as little as $38,000 per month. From that were to be subtracted mortgage payments of $45,000, payroll of $20,000 and rent of $10,000. On top of that, the receiver noted property tax installments of between $25,000 and $50,000 were about to come due.


It is hard to speculate what might have happened to investors’ money if federal investigators had not stepped in, and how many more people might have joined the club and potentially lost money.

Few people were willing to discuss the case on the record apart from individual investors. A handful of financial watchdog organizations, numerous lawyers involved and virtually all government officials on the case, including SEC representatives and the court-appointed receiver, declined or did not respond to requests to address the case publicly.

Nase and his lawyer also did not respond to requests for comment.

The U.S. attorney’s office was silent as well when asked whether it was considering filing charges related to the SEC case.


Laura Cook, director of the Washington, D.C.-based National Center for Victims of Crime’s Financial Crime Resource Center, said it’s not unusual for people who have lost money to family and others close to them to struggle with accepting they were cheated.

“It’s really hard for people to wrap their mind that this person has defrauded them,” she said. “It’s kind of like a denial thing.”


There’s no question the court’s receiver has, as several investors complained, run up a sizable bill while sorting through the club’s finances. Since April 2016, Solana Beach receiver David P. Stapleton has earned $173.44 per hour working on the case. He has engaged the help of a law firm specializing in receivership matters, Los Angeles-based Allen Matkins Leck Gamble Mallory & Natsis LLP, at a rate of $478.76 per hour.

Court records show their combined bill has so far come to about $1.6 million, all of which comes from a pot of money that otherwise would have been available to the club’s investors and vendors.

The receiver’s fees are approved by the court and reviewed by the SEC. Stapleton and Allen Matkins took on the complex task of sifting through the company’s varied operations and assets, handling the rental and sale of multiple properties with splintered ownership, and dealing with investors who resisted his attempts to consolidate club assets.


For all the investors who stood by Nase, there were also skeptics who refused to put in money, pulled out or consciously limited their contributions.

Bakersfield businessman Alex Otten, whose son invested in the club, went to a meeting and decided he didn’t like the way the operation was presented. He chose not to invest, partly because of Nase’s promise of consistently high returns.

“He was a little slick, you know what I mean?” Otten asked. “Not to the degree of (imprisoned Bakersfield real estate investors David) Crisp and (Carl) Cole … (but) kind of in that same camp.”


Bakersfield resident Annette Dominguez put in $1,000 of her son’s money as a test but opted not to invest anything further after spotting what she considered red flags. The returns Nase was promising seemed unreasonably high to her, and meetings seemed to focus on recruitment and Nase’s personality.

“It was all about the relationship (club members) had with the key individual,” Dominguez said, adding that the focus on Nase seemed to foster cohesion. “They felt connected, like this was a trustworthy thing to do.”


Bakersfield investor and businessman Tabari Brannon initially resisted, thinking what looks too good to be true probably is. But after a friend put in a substantial amount, Brannon kicked in about $600 of his own.

He remembers other investors cashing out before the club’s assets were frozen. He also recalled overhearing at a club meeting one night a heated conversation behind closed doors between Nase and an investor. Brannon kept his money in anyway.

“(Nase) appeared to be a trustworthy person,” he said. “I guess it was his transparency, his demeanor.”


Odis Figures, age 81, invested along with her sister, Ruby Lane, and other members of her family. She attributed the club’s closure to a grudge but declined to elaborate, referring questions to the nephew who had persuaded her to invest in the club.

“I don’t think it was a bad investment,” she said.

Nephew Irwin Lane wouldn’t disclose the size of his and his family’s investments. He said he remains unconvinced Nase was guilty. He said he’s frustrated with the receiver’s fees. Everything seemed to be going fine until the SEC came along, he added.

“I think the system is corrupt on both ends,” he said. “It’s a lot of foolishness to me. … I just choose to go on with my life.”

John Cox can be reached at 661-395-7404. Follow him on Twitter: @TheThirdGraf.

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