Former Maui residents sentenced for fraud charges related to $26M Ponzi scheme

maui-island

On Thursday, U.S. District Judge Derrick K. Watson sentenced George Lindell, 68, and Holly Hoaeae, 41, both formerly of Maui, to 210 months and 120 months imprisonment, respectively, for their involvement in operating an extensive Ponzi scheme in which 166 individuals were induced to invest over $26 million dollars.

A federal jury found Lindell and Hoaeae guilty of eight counts of mail fraud and two counts of wire fraud after a 27-day trial concluding in May 2015.

Lindell was also convicted of four counts of money laundering.

Judge Watson also ordered both defendants to pay restitution of $8.9 million dollars representing the net loss to investors in the case.

According to evidence produced in court, Lindell and Hoaeae began an investment scheme in connection with their operation of their business “The Mortgage Store,” in which they issued promissory notes promising to pay a guaranteed rate of return of seven percent. Lindell and Hoaeae, using radio ads, magazines and a weekly radio show, urged potential investors to attend their weekly workshops at “The Mortgage Store” where they taught seminars on how to “harness” or use the equity in their homes for investment purposes.

The two of them would then utilize their status as mortgage brokers to refinance investor residences in order to extract the equity in investor homes for the purposes of investment. They would then urge investors to invest money in their investment scheme, known as “The Parking Lot,” where investors could “park” their money and earn guaranteed rates of interest.

Lindell and Hoaeae advertised the Parking Lot as “safe” and invested largely in secure corporate bonds in Fortune 500 companies. In truth, they were investing in junk bonds and/or marginal real estate investment activity, and using the bulk of the funds to support their luxurious lifestyles and pay existing investors with new investor funds.

During the scheme, Lindell built a $3.5 million residence above Lahaina in large part with investor funds and Hoaeae used hundreds of thousands of dollars in investor funds to fund her personal lifestyle including trips, automobiles and pay extensive credit card debt.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s