A now-defunct Chula Vista firm, RMR Asset Management, and its head, Ralph Riccardi, used fraudulent schemes to deprive individual investors of municipal bonds, according to a suit filed Tuesday (August 14) in federal court.

Individual, or retail investors, want municipal bonds because of their tax advantages. So the government goes out of its way to permit individuals to buy new issues of municipal bonds.

But according to the suit, Riccardi and a dozen of his fellow alleged schemers used fraudulent methods to “flip” the bonds to broker-dealers for a fee, thus depriving individuals a chance to buy the bonds. To pull off the scheme, the defendants misrepresented their identities, used fictitious business names, manipulated sales tickets, and falsified their locations, according to the securities agency.

Only one of the 12 Riccardi associates, David Lutteg, is from San Diego, and he appears to have played a minor role. RMR, which operated out of a home, was closed down earlier this year. Riccardi and the others settled with the agency without admiting or denying the charges, a practice that is common in securities agency cases. However, the defendants have agreed to return their ill-gotten gains and may be subject to industry bars or suspensions.