PORTLAND, Ore. (KOIN) – Federal prosecutors settled a $40 million fraud cause with plea deals Friday morning.
Michael S. Holcomb, Gary L. Holcomb, Jennifer L. Chalmers, and Kristen S. Van Breemen appeared in federal court where they all pleaded guilty to to operating a Ponzi scheme in Oregon.
Their trial dates, which were scheduled for November, have been canceled.
Michael and Gary Holcomb each pleaded guilty to one count of wire fraud and one count of money-laundering. Van Breemen and Chalmers each pleaded guilty to one count of money-laundering.
According to court documents, between 2008 and 2012, the 4 solicited individuals to invest in their insurance businesses and accepted investments through their insurance businesses, Berjac of Oregon and Berjac of Portland. The four are accused of falsely promising investors that their investments were safe, secure, and earning high rates of return.
“Rather than invest the money as promised,…[they] diverted the money for personal use, speculative real estate projects, and to make interest and other payments to earlier investors,” court documents state.
“Based on the defendants’ conduct, more than 400 investors lost more than $40 million,” prosecutors stated.
In July, a federal grand jury handed up a new indictment against the 4 suspects linked to the alleged Ponzi scheme. The IRS, at the time, declined to comment, saying the matter was still an “on-going investigation.”
The first indictment came down in Nov. 2015 and charged all 4 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 added additional counts mail fraud.
Sentencing for the 4 individuals is scheduled for Feb. 7, 2018.