Awhile back, we received a call from a woman named Faith Pyka in California. She’d found a story in our archives, “The Double Life of Lauren Baumann,” from November 1998, that confirmed her worst fears. Pyka had fallen victim to a real estate scam. A decade ago, in Plano, Baumann had created a Ponzi scheme, cheating 80 investors out of $2.7 million, spending it on extravagant parties and Neiman Marcus shopping sprees. Her husband, Ed, turned her in to the SEC, but she has re-emerged with another real estate and loan scheme.
Intern Alexandra Millard picks up the story from there:
Pyka says she gave a total of $415,000 to Baumann, borrowing some of that money against her home equity line of credit. Pyka says that she and a man named Mitch Herre thought they were investing in a property in Laguna Beach with Baumann, but when the land was still undeveloped after six months, Pyka began to panic. One day, Baumann asked her business partner, Amee Parrott, and Pyka to meet her on top of a mountain near the property.
“She brings her Bible and she says she wants to bless this property,” Pyka says. “She has this framed picture for me. It’s black and white and it’s a verse from the Bible. ‘Faith is the substance of things hoped for, the evidence of things not seen.’ She gives Amee some other slogan from the Bible, and she proceeds to tell us that she has spent time in the federal penitentiary in the state of Texas for embezzlement. That’s when I knew I was in really big trouble.”
That’s when Pyka started poking around on the Internet for information about Baumann and discovered the D Magazine article. She was not only shocked to discover that Baumann had fooled so many others, but also that Herre and Parrott already knew about her past and trusted her anyway. She had fooled them, too.
“She used her faith in God and played the holy roller,” Herre says. Her dedication to her church convinced him that she had changed. Baumann told Parrott that her ex-husband in Plano was to blame for her previous troubles.
“It’s true she loves her kids, but you wonder how much when she puts herself back in this position,” Parrott says.
Like she had in Plano, Baumann maintained the illusion of success to draw in new investors. She convinced a dealership to lend her a Ferrari and furnished her house “like the Taj Mahal” with Herre’s money. She spent the first $6,000 that Pyka gave her in one shopping trip, telling Parrott she had accidentally used the wrong credit card.
“She has an obsession with her body,” Pyka says. “She’s always on the way to the gym when I call her, even at 9 p.m. She has three kids. What’s she doing always going to the gym at 9 p.m.? Perfect body, breast implants, as I found out from the article. Totally a fake.”
Baumann’s ex-husband, Ed, wrote a letter in July 2007 warning Baumann’s business contacts that she would try to scam them. Pyka never received a letter, but Baumann cut off all contact with her after it was sent out.
Baumann’s behavior went from erratic to bizarre. She claimed that construction could not begin on the Laguna Beach property until a geological check was performed because God had told her that they would find diamonds. The property was on Diamond Street. Then she retreated to her house and wouldn’t come out. When Parrott tried to get her to leave her house, she found that Baumann hadn’t slept for days, wasn’t bathing, and had been wearing the same western shirt and cowboy boots for a week. Leaving her sons in her mother’s apartment, Baumann fled.
“She bought a new SUV in my name and took off to Santa Rosa, seven hours away, to go to some church,” Parrott says. “I think she’s setting up an insanity plea. The market dropped really bad, and she’s spent so much money, and I think she just went nuts.”
Parrott is putting together a class action lawsuit against Baumann and the broker who allowed her to operate with a license that expired in 1994. Pyka cannot afford to sue. “I have no money to get my money back,” she says. “She took $415,000 from me, plus interest. She basically took everything I have and left me with a piece of property I can’t make payments on. It’ll probably go into foreclosure. God forbid I go bankrupt. My equity line was huge. If they call my equity line, I’m done.”
Today, Baumann is hiding out in Herre’s $2.2 million Huntington Beach mansion, which she promised to buy but has not made payments on in months. She refuses to leave even though Herre has shut off the electricity and contacted the sheriff. She has created an elaborate business plan for her church, run by the pastor who let her live in his parsonage when she was released from prison. She also claims she has come up with a new form of energy centered around pink flowers.
“She’s so persuasive. She can convince you of anything,” Parrott says. “She can tell you anything negative about her before it comes out, and she can put a spin on it so it doesn’t make you think badly of her. She sat in prison for three years thinking of what she did wrong — not morally, but what she did to get caught.” – Alexandra Millard