Tuesday, September 10, 2002
Two San Bernardino County Men To Be Arraigned on Charges of Swindling Investors
By a MetNews Staff Writer
Two San Bernardino County men are scheduled to be arraigned tomorrow on charges they operated an investment program federal prosecutors allege defrauded investors out of more than $25 million, Assistant U.S. Attorney Monica Bachner said yesterday.
John C. Jeffers of Mentone and John Minderhout of Yucaipa were scheduled to appear at a post-indictment arraignment in U.S. District Court in Riverside.
At a hearing Friday, Jeffers was jailed, while bail was set for Minderhout at $250,000, Bachner said.
The charges were announced Friday by the U.S. Attorney’s Office in Los Angeles, following an indictment two days earlier by a federal grand jury in Los Angeles.
The 46-count indictment alleges that Jeffers and Minderhout operated a Ponzi scheme and defrauded investors in a high-yield investment program they called “Short Term Financing Transaction.” The two allegedly collected funds from investors throughout the country for four years, using some of the money collected to pay off investors in an effort to keep the scheme operating.
At the center of the alleged scheme was a Redlands-based company, J.C. Jeffers & Company. Jeffers and Minderhout allegedly told some investors that proceeds would be used to finance humanitarian projects all over the world. Jeffers is accused of making false claims that the program was licensed by the Federal Reserve, and that the program had a relationship with the International Monetary Fund as well as the United States Treasury.
The U.S. Attorney’s Office stated in a written release that the “claims made by Jeffers and Minderhout are similar to those made by perpetrators of ‘prime bank’ or ‘roll’ programs that were popular scams in the 1990s.”
Most of the money collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scheme going and to pay his own large salary, prosecutors said.
Both men are charged with 17 counts of wire fraud and 19 counts of mail fraud, each of which carry a maximum penalty of five years in federal prison. Additionally, Jeffers is charged with 10 counts of money laundering; one of which carries a potential penalty of 20 years in prison. The other nine carry a penalty of up to 10 years for each count.
The case was filed following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.
Copyright 2002, Metropolitan News Company