Two more plea in W. Mich. Ponzi scheme
Jul 21, 2015 at 1:38 PM
Thomas Doctor, 53, and Douglas Kacos, 58, were charged in Kent County Circuit Court with the misdemeanors punishable by up to two years in prison, and/or a $10,000 fine or twice the value of the proceeds, whichever amount is greater. A no-contest plea is not an admission of guilt but is treated as such for sentencing.
Doctor and Kacos are scheduled for sentencing on Jan. 27.
The pleas follow a joint investigation by the state's Attorney General's Office and the Department of Insurance and Financial Services, which revealed API defrauded about 140 victims out of a total of $9 million. At least one of the victims is a Grand Haven-area resident.
In March, Attorney General Bill Schuette announced that two other men entered pleas in the same Ponzi scheme. Jeffrey L. Ripley, 61, of Sparta, and Danny Lee VanLiere, 62, of Grand Rapids, pleaded no contest to one count of racketeering and two counts of selling unregistered securities before Ottawa County Circuit Judge Edward Post.
Ripley and VanLiere were both sentenced June 21 to serve 6-20 years in prison. Ripley was ordered to pay $5.3 million in restitution and VanLiere was ordered to pay $3 million.
Schuette said API Worldwide Holdings and its operators ran a Ponzi scheme from July 2006 through January 2012, selling fake securities and promising huge returns on investments. The investigation revealed that they targeted elderly investors. The victims were defrauded of amounts ranging from $3,000 to $600,000 each.
Despite knowledge that Ripley had been caught and punished for selling unregistered securities on two previous occasions, it is alleged that Doctor and Kacos allowed, aided and abetted Ripley in operating a third unregistered investment scheme by acting as a registered agent and account holder for API Worldwide. Doctor and Kacos also allegedly opened financial accounts used to receive or liquidate cash, and orchestrated and compensated third parties to wire investor funds to various foreign destinations, including Africa and the United Kingdom, in order to avoid detection by regulatory or law enforcement organizations.
Both Kacos and Doctor invested money in API Worldwide.
Authorities say Ripley and VanLiere preyed on elderly victims by convincing them to cash in certificates of deposit and other legitimate investments in order to invest the proceeds in API Worldwide. Ripley and VanLiere tracked maturation dates of CDs for some victims to persuade the victims to transfer the funds to API Worldwide immediately after the CD matured.
The investigation revealed that although some investors did receive a return, those returns were derived from funds from other investors, which is the trademark of a Ponzi scheme, Schuette said. None of the victims received any returns on their “investments,” and some even lost their life savings to the scam.
Schuette encourages senior citizens to exercise caution before investing their money with those who promise exorbitant returns. Key tips to avoid falling victim to a Ponzi scheme or investment fraud include:
— Check out your broker or adviser.
— Confirm that your broker and financial adviser is registered and in good standing.
— Contact the Bureau of Commercial Services with the Department of Licensing and Regulatory Affairs at 517-241-6345.