Federal authorities announced last week that one of the perpetrators of a fraudulent investment program - a so-called Ponzi scheme that operated at one time out of an Enumclaw bank and defrauded more than 3,200 victims in the United States and Canada of approximately $74 million - was sentenced to almost 25 years' imprisonment.
Steven C. Moreland, 35, of Tyler, Texas, was convicted in August 2002, following an eight-week jury trial, of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, three counts of mail fraud, three counts of wire fraud, and six counts of money laundering. Five other persons either entered guilty pleas, or were convicted at trial, on charges of fraud and conspiracy in connection with the same fraudulent investment scheme. Those persons are John W. Zidar, 60, of Gardnerville, Nev., John W. Matthews, 56, of Chandler, Ariz., Elizabeth Anne Phillips, 57, of Ravensdale, William H. Cravens, 61, of La Jolla, Calif., and Larry Hall, 61, of St. Paul, Minn.
Zidar, the leader of the fraudulent investment scheme, recently was sentenced to 30 years' imprisonment.
According to the evidence at trial, beginning in 1997 and continuing until 2000, the defendants induced members of the public to invest in a series of purported investment funds called Vista International, Oakleaf International and Rosewood International. Investors were told that their funds would be invested in the "private economic arena." Investors were required to pay $1,028 to purchase a unit in Vista or $1,294 to purchase a unit in Oakleaf or Rosewood. Investors were directed to send their applications to an address in Enumclaw, and were directed to send their investments to the same address or to wire them to a bank account near Tacoma.
The defendants promised investors a return of 120 percent per year and told investors their principal was assured against loss. Investors also were told that if they rolled a single unit over for ten years it would be worth millions of dollars. In fact, the defendants actually were operating a Ponzi scheme, in which early investors were paid with later investors' money. The evidence at trial established that the defendants diverted millions of dollars for their own use and benefit, including to purchase houses and expensive vehicles, and paid substantial commissions to the agents who solicited the investors. The defendants also laundered millions of dollars through bank accounts in Samoa, the Bahamas, and Costa Rica. The scheme operated by the defendants is one of the largest investment frauds ever operated in the State of Washington.
During the course of the investigation and prosecution of this case, the government recovered in excess of $20 million dollars of victims' money from bank accounts controlled by the defendants and in assets purchased by the defendants using victims' money. A large proportion of this money was recovered from bank accounts in Samoa.
