A federal grand jury in Honolulu, Hawaii returned a 17-count indictment of George Lindell, 65 , and Holly Hoaeae, 39, for operating an alleged pyramid or “Ponzi” scheme between January 2005 and November 2010.
The indictment charges Lindell and Hoaeae, who were Maui residents at the time of the alleged offenses, with 13 mail fraud and three wire fraud violations and one count of money laundering conspiracy, each of which carry a maximum sentence of 20 years imprisonment.
The indictment also seeks a forfeiture of various properties and assets, including up to $8,626,588.86, which the indictment alleges represents the total amount of proceeds obtained as a result of the fraud.
In addition, the defendants face fines of up to $250,000 on each of the fraud violations and up to $500,000 or twice the value of the funds or financial instruments involved on the conspiracy charge.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to the indictment, Lindell and Hoaeae, neither of whom was licensed by the State of Hawaii to accept deposits or investments, induced others to invest funds with them in an investment described by Lindell and Hoaeae as “The Parking Lot.” The investors could earn between six and eight percent 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.
The indictment alleges Lindell and Hoaeae refinanced investors’ personal residences through their business “The Mortgage Store” for amounts well above the existing mortgages against those propertie; induced clients to invest the equity drawn from their personal homes with them; and then used it on personal expenditures, including the construction of a residence in Lahaina, Maui, the purchase of a Lexis automobile, payment of a $27,967 debt on a truck loan, and payment of $28,500 for a New Zealand safari.
The charges contained in the indictment are merely allegations, and the defendants are presumed innocent until and unless proven guilty.