GRAND RAPIDS, Mich. (WOOD) - Despite his protestations to the contrary, the Michigan Attorney General's Office says the owner of a popular Grand Rapids restaurant chain was an active participant in a Ponzi scheme that bilked about 140 people out of $9 million.
Target 8 investigators exposed the scheme in 2009. Since then, scheme mastermind Jeff Ripley and another man, Danny VanLiere, have both pleaded guilty and been sentenced to prison.
Tuesday, Target 8 found that Doug Kacos and Thomas Doctor have been charged with money laundering in connection to the scheme.
But Kacos, the owner of the New Beginnings restaurant chain, told Target 8 over the phone Tuesday night that he was a victim.
On documentation filed with the state, Kacos was listed as the "Resident Agent" of the company API Worldwide Holdings, LLC, which was behind the multi-year scheme. He said he put his name on the corporate paperwork with the hope he'd get some of his money back.
"I just had my name on the LLC, and that was pretty much it," he said.
But court documents obtained by Target 8 allege otherwise. Martin May of the Michigan Attorney General's Office testified before a Grand Rapids magistrate that Kacos "Participated, Orchestrated, Aided and abetted the money laundering and securities fraud scheme in several fashions."
May testified that Kacos admitted he deposited checks from the ill-gotten security investments into his legitimate New Beginnings business accounts or cashed them against his business account. He then allegedly gave the money back to Ripley and VanLiere.
Kacos also allegedly allowed one of his restaurants to be used as a registered address, even though no business for the scheme's LLC was conducted there, the documents say.
The state alleges that for several years, Kacos organized crews of employees and young people to wire victims' money overseas from various party stores. They went to a number of locations to avoid controls set up by Western Union and Moneygram to prevent fraud, the documents say, and were paid between $20 and $50 to send the wires.
Doctor is also accused of helping the scam by organizing crews to send the wire transfers.
The about $9 million the scheme accumulated was sent to various countries including England, Spain, Ghana and Nigeria in thousands of money transfers, Target 8 learned in June.
At the time, VanLiere's attorney said the convicted con men could have been conned themselves by another man now believed living in Africa who has been charged but not caught. Or they all might have been caught up in a classic Nigerian Scam run by others.
"Both men are accused of recruiting investors and wiring large sums of money overseas allegedly to avoid detection and tracking," Joy Yearout, a spokesperson of Attorney General Bill Schuette, told 24 Hour News 8 Tuesday in an email.
But none of the testimony given before the magistrate implicated either man in the recruiting of investors.
Both Doctor and Kacos have been released from jail on bond.
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