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Pastor convicted in Ponzi scheme
Perris pastor convicted in Ponzi scheme
A Perris [California] pastor and another man were convicted Friday in federal court of bilking more than 500 people out of more than $32 million in a fraudulent investment scheme.
Robert Jennings, 58, of Perris, and Henry Jones, 53, formerly of Marina del Rey, were convicted on mail fraud, wire fraud and securities fraud charges, according to the U.S. attorney’s office. Jones was also convicted on charges of money laundering and contempt of court.
Jennings faces a maximum sentence of 180 years in federal prison. Jones faces up to 250 years. A third defendant, Arthur Simburg, 63, of Portland, Ore., previously pleaded guilty and is awaiting sentencing.Jennings told investors he was president of Tri Energy Inc., a coal mining company that he said had four coal mines and more than $1 million worth of stockpiled coal. The three men promised massive returns on investments, up to 300 percent within 60 days. But Tri Energy made no profits and had only two coal mines, according to the indictment.
[...]The groups discussed the investments during nightly conference calls, many of which included a group prayer and a claim that the gold transaction was “divinely inspired.” Many of the calls also included information about what the men claimed were “humanitarian projects” funded by the profits, the indictment said.
The calls were recorded so more investors could hear them. The scam was a Ponzi scheme, in which early investors were paid with money from later investors.
Ponzi Schemes
In every Ponzi scheme, some investors profit early on. But courts can force them to return the money, even if they were unaware of the fraud.
In the 1920s, Charles Ponzi hooked so many fish with this lure that such schemes have been known by his name ever since.
Ponzi promised to double investors’ money by trading international mail coupons. In reality, he just paid early investors with money from new suckers.
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