Sacramento, California - Ken Sarna, 50, of Vallejo, was sentenced today by United States District Judge Troy L. Nunley to two years and six months in prison for one count of selling unregistered securities, United States Attorney Benjamin B. Wagner announced.

According to court documents, Sarna was the Director of Operations for Heaven Investments Holding Corporation (HIHC), a Sacramento company that was family-owned and operated by, among others, codefendants Akbar Bhamani, Zain Bhamani, and Aly Bhamani. From February 2007 through August 2008, HIHC solicited investors to participate in its investment programs, including the Tenants in Common (TIC) program. The TIC program was to use investor money to develop four properties, including a hotel in Oakland. HIHC sold fractionalized ownership interests to investors in each of the properties. These fractionalized interests qualified as securities, but were never registered with the SEC. Investors in HIHC lost between $2.5 million and $7 million.

In sentencing memoranda previously filed with the District Court in this case, the government argued that the sale of unregistered securities was related to the operation of HIHC as a Ponzi scheme, and that the company made various misrepresentations to investors about its holdings and how the investors’ money would be secured. At the sentencing of Akbar Bhamani, the government argued that none of the investors were told that HIHC was on the verge of collapse, and as late as May and June of 2008—just months before the company declared bankruptcy—the defendants were still bringing in large investments with promises that HIHC was a “slam dunk” investment.

The court previously sentenced Akbar Bhamani, the founder and CEO of HIHC, to eight years in prison after hearing from a number of investors who described the devastating impact of their losses to HIHC. In some cases, investors lost their retirement and life savings. The court sentenced co-defendants, Zain Bhamani to two years and nine months in prison and Aly Bhamani to 11 months in prison. Shaun Bhamani was sentenced to four months in prison for his failure to report a mortgage fraud that was related to HIHC’s failed investment programs. Judge Nunley has ordered the defendants to pay restitution, the amount of which will be determined at a later proceeding.

This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Michele Beckwith prosecuted the case.