“The Mortgage Store” Owners Indicted for Alleged Ponzi SchemeMay 24, 2013, 9:18 AM HST (Updated May 24, 2013, 12:29 PM) · 0 Comments
By Maui Now Staff
Two former Maui residents were indicted for operating an alleged pyramid or Ponzi scheme on the island that spanned more than five years.
The 17 count indictment was handed down by a federal grand jury yesterday against George Lindell, 65, and his daughter, Holly Hoaeae, 39.
According to Justice Department documents, the indictment charges the two with 13 mail fraud and three wire fraud violations, and one count of money laundering conspiracy.
Each count, authorities say, carries a maximum sentence of 20 years in prison if convicted.
Justice Department officials say the indictment alleges the two used funds gained, in part, on the construction of a home in Lahaina, the purchase of a luxury car, payment of debt on a truck loan, and payment for a safari in New Zealand.
US Attorney for the District of Hawaii, Florence Nakakuni explained how the alleged Ponzi scheme worked in a media statement saying,
“According to the indictment, Lindell and Hoaeae, neither of whom was licensed by the State of Hawaiʻi to accept deposits or investments, induced others to invest funds with them in an investment described by Lindell and Hoaeae as “The Parking Lot,” where investors could earn between six and 8% return on their investment, but instead of investing the funds into safe holdings such as bonds, as represented, the defendants used the funds for their personal needs.”
Nakakuni continued saying the indictment further alleges that,
“Lindell and Hoaeae refinanced investors’ personal residences through their business “The Mortgage Store” for amounts well above the existing mortgages against those properties; induced clients to invest the equity drawn from their personal homes with them; and then used it on personal expenditures.”
The indictment seeks a forfeiture of various property assets including up to $8.6 million, which Justice Department officials say represented the total amount of proceeds allegedly obtained through the scheme.
***Supporting information courtesy US Department of Justice.