Associated Press, Mar. 17, 2003
SAN DIEGO (AP) – The FBI said Monday it had broken up a “cult-like” investment-fraud and money-laundering ring headquartered in San Diego that may have cheated investors from coast-to-coast out of more than $50 million.
Eight people, including alleged ringleader John Franklin Harrell, were arrested early Monday on federal charges of fraud, money laundering and conspiracy in the year-old “Operation Good Samaritan” investigation. Search warrants were executed in San Diego, Las Vegas, and Dallas.
Over the course of eight years, Harrell, 69, of Santee and his associates allegedly used religion and promises of philanthropy to lure investors from Florida to Oregon. The money financed their lavish lifestyles, including luxury apartments and corporate jets, according to the FBI.
Dozens of victims lost investments ranging from $2,000 to several million dollars. Authorities believe more victims may step forward.
Harrell claimed to be in charge of an offshore trust created by Joseph Smith, the founder of the Mormon Church, worth $1.6 trillion, according to the FBI. Investors were told that money would be available to them if they gave him enough seed money to start an insurance company called Good Samaritan.
“This is the classic P.T. Barnum case – the bigger the lie, the more people are apt to believe it,” said John R. Kingston, the special agent in charge of the FBI’s San Diego bureau.
The company, based in Texas, was little more than an office and phone-forwarding system, said FBI spokeswoman Jan Caldwell. The trust was pure fiction. The ring conducted most of their dealings out of the back of a black van.
Harrell, described as extremely charismatic, used religion to control his enterprise, Caldwell said. He began investor meetings with a prayer and attendees were told to hug each other.
“It was truly almost cult-like,” Caldwell said. “He did not hesitate to threaten to kill people if he found out they were working for the government.”
Harrell said that anyone who double-crossed him would be dealt with by a powerful shadow government called the Committee of 300, Caldwell said.