Indiana Secretary of State Todd Rokita praises state/local collaboration that leads to successful prosecution in Sullivan County affinity fraud case
Jury finds former pastor Vaughn Reeves guilty on nine felony violations of the Indiana Securities Act; sentencing set for Nov. 19, 2010
INDIANAPOLIS – Former pastor Vaughn Reeves will be sentenced on nine felony counts of securities fraud, facing up to eight years in prison on each, after being found guilty late last week by a Gibson County jury. The verdict followed a lengthy trial involving charges related to a multi-million dollar, faith-based affinity fraud scheme that utilized a modified Ponzi scheme.
The investigation and prosecution were the results of a collaborative effort led by Sullivan County Prosecutor Robert Hunley II, with support from the Secretary of State’s Prosecution Assistance Unit and the Indiana State Police.
“This is a very good result of a strong partnership that demonstrates what can happen when a dedicated multi-agency law enforcement team comes together with the single goal of protecting Hoosiers from financial attack,” Secretary Rokita said. “I could not be more pleased with the leadership of Prosecutor Hunley, or with the tireless efforts of our Securities Division team, led in this case by Carol Mihalik and investigator Charlie Williams.”
Hunley named Mihalik, Senior Counsel with the Indiana Securities Division, a special deputy prosecutor for the trial, which took place over the last two weeks in Gibson County.
Reeves was found guilty of duping investors into buying bonds that raised at least $120 million. The stated purpose for the vast majority of the bonds was to supposedly finance church construction and expansion. However, according to testimony, Reeves took part in shuffling this money among various accounts deceiving investors into believing money was being used for the churches while actually being diverted for more speculative investments and to make interest payments on other bonds to conceal their defaults and other performance problems.
Reeves was the leader of a company called Alanar, Inc., which served as the umbrella company for the scheme. He is scheduled to be sentenced on Nov. 19, 2010.
About the Prosecution Assistance Unit
In 2004, Indiana Secretary of State Todd Rokita created the Prosecution Assistance Unit within the Securities Division of the Secretary of State’s Office. Its sole purpose is to assist police and prosecutors in investigating and prosecuting criminal violations of the Indiana Securities Act and the Indiana Loan Brokers Act. The investigators and attorneys in the unit collectively have over 50 years of experience in investigating and prosecuting criminals. Since its inception, the Unit has helped to convict 54 defendants in state and federal courts across Indiana. In addition, courts have handed down over 420 years in sentences, and have ordered over $26 million in restitution for crime victims.
Media contact: Jim Gavin 317.233.8655 or firstname.lastname@example.org