Most of scammed $50M still unrecovered

GRAND RAPIDS, Mich. (WOOD) - Even after years of searching, the federal government has been able to recover a only a tiny amount of the about $50 million that two Kent County men allegedly swindled from hundreds of investors.

Target 8 first started looking into the dealings of David McQueen in 2007. He has since been indicted along with Trent Francke, Jason and Donald Jubert and Penny Hodge in the $50 million scam.

In an expanded federal indictment document unsealed last week, the government says it has located only $433,000 of the $46.5 million that hundreds of investors lost. The government says the alleged swindlers spent most of the investors' money and often just squandered it.

Norm Westrate didn't think he would ever have to work again after he retired from more than 30 years at Steelcase. Now, he's a security guard.

"Well, retirement's done. I can forget about that, probably forever," he said.

But he panicked when his stock investments started shrinking during the 2008 recession and jumped into one of David McQueen's investment schemes. Within a year, his retirement nest egg vanished and he had zero income.

"We went on food stamps for a while, Bridge Card, state emergency relief for heating and whatever we could," he said.

A federal program to save people's homes got Westrate and his wife a lower mortgage payment and they're now getting some cash from Social Security.

But Westrate said he can't see himself ever retiring because their nest egg is gone. He's glad McQueen and the others are being prosecuted, but was hoping to the government would find more than a few hundred thousand dollars to return to investors.

"If you start splitting that up between close to a thousand people, well, there ain't much there," he said.

Phil Catlett of the Better Business Bureau said it's not unusual for people to get back only pennies on the dollar when an investment scam crashes.

"I think it's sad and it's out of everybody's control," he said. "Once somebody chooses to enter into one of these deals, it isn't necessarily so that somebody's going to be able to fix it for you."

That's even more reason why people need to research every investment that catches their eye, Catlett said. And luckily, he said, the Internet makes that easy.

Westrate agrees.

"Do your research. Don't jump in," he said.

For now, Westrate is waiting to see the people who ruined his retirement pay for their crimes and is hoping some more money will turn up.

"If we're lucky, maybe we'll get a few nickels or dimes," he said. "But at this point, something -- anything -- would be great and the sooner the better."

Westrate said he knows of McQueen investors left in even worse financial shape than him.

The indictment document says that's the result  of the plan to prey on the vulnerable, including the elderly who often mortgaged their homes or cashed in their retirement accounts to invest in the schemes.