GRAND RAPIDS, Mich. (WOOD) - Two Byron Center men indicted in a $46.5 million investment scam used God and insurance agents to lure their victims, federal agents alleged.
David McQueen, a target in earlier Target 8 investigations, and his alleged partner, Trent Francke, tried to ""bolster their credibility" by telling investors they were "Christians" who preferred to deal with "God-fearing, church-going people," according to an indictment filed Wednesday in U.S. District Court.
In fact, the feds say, McQueen had a catch-phase: that he was "blessed to be blessing."
The two were named in a 16-count indictment. Both are charged with eight counts of mail fraud; McQueen is charged with five additional counts of money laundering, while Francke is charged with two money-laundering counts. McQueen also is charged with one count of structuring.
While the indictment doesn't say how many investors lost money, the state has said that 400 investors lost about $50 million.
The indictment also alleges that local insurance agents -- who are not identified -- played a big role in the scheme.
It alleges that McQueen and Francke worked with insurance agents to recruit investors.
"Investors, many of them retired and/or elderly, trusted their insurance agents who vouched for McQueen and Francke," the indictment states.
Those agents encouraged clients to invest their life savings, cash out IRAs and mortgage their homes. In doing so, they fed "tens of millions of dollars" into the scheme.
The feds say the agents pushed clients to invest as much as possible, knowing the risks were high while reassuring clients the investments were safe and guaranteed.
In return, the feds say, the insurance agents got "exorbitant" commissions.
The scam began in 2005 and involved a handful of alleged investment companies, identified as Accelerated Income Group, International Opportunity Consultants, Diversified Global Finance and Diversified Liquid Asset Holdings."
The suspects promised to deliver returns of 1 to 5 percent a month and, in at least one case, 100 percent a year.
Instead, they used the money to pay themselves "exorbitant salaries, pay personal or unrelated business expenses, pay commissions to those that referred investors to the funds and make bogus 'interest' payments back to investors," the indictment states.
"The remaining funds were squandered on poor investments or get-rich-quick schemes."
One company alone, International Opportunity Consultants, created by McQueen in 2007, brought in $14 million from investors, according to the indictment.
The feds say McQueen got $1.5 million of that, and gave his wife another $135,000, while Francke took $450,000.
McQueen also paid $1.9 million in commissions for agents and others who brought in investors, the feds alleged.
It was in 2008, the feds allege, as the earlier funds were going broke, that the suspects created another company, Diversified Global Financing.
And, they gambled.
They held meetings in Grand Rapids, Fort Wayne and Indianapolis to pitch the new fund. At these meetings, they presented checks to existing investors for the amount the suspects claimed were still in their accounts, the feds said.
The checks allegedly totaled $27 million, even though the suspects knew most of that money did not exist.
The suspects told the investors they could take their checks and leave, or invest it in this new company.
Most investors, the feds say, took the bait.
The suspects sent investors to a website where they could track their bogus balances, the indictment alleged.
While investors believed a total of $33.6 million was deposited into the company, the two suspects actually only transferred about $4.5 million, according to the indictment.
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