The man who leased Purgatory Restaurant and Nightclub pleaded guilty Wednesday to three counts of investor fraud in Sacramento Superior Court.
Donald Dunakin, 42, had been charged on 43 counts that included grand theft and false statements, according to court documents.
He is scheduled to be sentenced March 5.
Dunakin's arrest warrant indicated he accepted investments to his companies Dunakin Investments, Preferred Diversified Holdings and Platinum Performance Holdings without a license. Dunakin lost his license in 2009 after allegations that he made poor recommendations, the Department of Justice said.
An investigation of Dunakin's accounts found he solicited more than $1.5 million from investors, many of whom were over the age of 65, according to Dunakin's arrest warrant. Investigators identified 28 people who invested with Dunakin, the document says.
"Everybody was just blindsided," said Kathy Dotson, a Carmichael resident, on Thursday. She said she was scammed by one of Dunakin's investment companies.
"It would have been better if we had a gun in our face and robbed us because that way you know your attacker," Dotson said.
Dotson, 57, said her money was invested in August 2011. She said her financial adviser alerted her to the scam about four months ago, a day before she received a phone call from DOJ investigators.
"We invested into what we thought was securities, assisted living and things like that," she said. "We really didn't know our money was going to a bar and a restaurant and a coffee shop."