PORTLAND, Ore. (KOIN) – A federal grand jury has issued new charges in connection with a $40 million Ponzi scheme.
Michael S. Holcomb, Gary L. Holcomb, Jennifer L. Chalmers and Kristen S. Van Breemen will all be arraigned in U.S. District Court in Eugene on Monday afternoon.
According to the superseding indictment, which was filed last month, the scheme began in 2008 and continued throughout 2012.
The four suspects are accused of soliciting people to invest in their insurance premium financing businesses and took investments in their businesses, Berjac of Oregon and Berjac of Portland. To entice investors, the four falsely promised investors their investments were “safe, secure and earning high rates of returns,” according to the indictment.
Rather than invest the money as promised the four accused moved the money around so they could use it for personal gains.
More than 400 investors lost more than $40 million, according to the indictment.
The first indictment came down in Nov. 2015 and charged all four suspects with conspiracy to commit mail and wire fraud, mail fraud, conspiracy to commit money laundering, wire fraud, and money laundering.
Gary and Michael Holcomb, brothers, were each charged with bank fraud.
The new indictment adds additional counts mail fraud.
Berjac of Oregon and Berjac of Portland were founded in the 1960s. The company headquarters was in Eugene.
The Holcomb brothers became equal partners in the two businesses in 1998. Gary Holcomb was responsible for running Berjac of Portland and his brother was responsible for running Berjac of Oregon.
Records show that in 1994, Peter R. Snook, the managing partner of Berjac of Washington, was convicted of operating Berjac of Washington as a Ponzi scheme from at leat 1987 through 1991.
Van Breemen is Michael Holcomb’s daughter and eventually managed the day to day operations at the Portland office, according to court documents. His other daughter, Chalmers, eventually managed day to day operations at the Berjac of Oregon offices.
In 2012, the Oregon Division of Finance and Corporate Securities issued an order to stop selling unregistered securities – something they had been allegedly doing for 15 years. That year the two businesses merged and filed for bankruptcy.
In 2013, Michael J. Turnock was convicted of operating Bridge Premium Financing, formerly known as Berjac of Colorado, as a Ponzi scheme from 2002 through 2012. The Holcomb brothers were partners with Turnock until 2004.
The Oregonian/OregonLive reported in January 2017 that 3 banks and an accounting firm agreed to pay about $18 million to settle claims they knowingly aided and abetted the alleged Berjac Ponzi scheme.