Jury finds '3 Hebrew Boys' guilty in scam
COLUMBIA -- A federal jury on Friday found three South Carolina men guilty of swindling more than $80 million from thousands of investors, many of whom prosecutors say fell victim to the Ponzi scheme because of their mounting debt.
The jury of five men and seven women deliberated for less than four hours before finding Timothy McQueen, Joseph Brunson and Tony Pough guilty of nearly 60 charges each, including conspiracy, mail fraud, and money laundering.
The three showed no reaction during the 15 minutes it took to read the lengthy verdict. An hour later, the same jury ordered the men to forfeit $82 million, the maximum sought by authorities.
The trio called themselves the "3 Hebrew Boys" after the biblical tale of three men who were thrown into an inferno after refusing to bow to a statue, but emerged unscathed because of their faith. The three preyed on debt-plagued investors to ensnare them in a Ponzi scheme - "robbing Peter to pay Paul," Assistant U.S. Attorney Mark Moore has said.
The men called their scheme a ministry, telling people their mailed-in investments would earn fantastic rewards that would pay off their mortgages, car loans, or other debts, or pay lifelong dividends. Despite almost no financial training, they convinced at least 7,000 people they knew the secret of how to make money on the foreign currency exchange market. However, they invested less than 0.01 percent of their collections there, prosecutors said.
Investors from two dozen states, plus soldiers serving in Iraq, gave the men money to invest beginning in October 2004. Authorities seized $17 million when the operation was shut down less than three years later.
The men paid themselves salaries of about $1 million and spent more than $25 million on assets including three suburban Atlanta condos, luxury suites at football stadiums, a Gulfstream jet, limousines, a motorcoach and 20 acres in Orangeburg, prosecutors said. Defense attorneys claimed those were investments that would make money for clients
Their attorneys argued the three intended to honor the contracts and paid out more than $22 million to early investors. Contract clauses warned the investment was risky, they argued, but prosecutors said the three lied about how they would invest the money.
While jurors debated the amount of forfeiture Friday, U.S. District Judge Margaret Seymour revoked the trio's bond until their sentencing hearing, which should be in several months. Before doing so, Seymour read from a rambling motion filed Friday by the defendants in which they called any charge against them "a deliberate act of war ... and treason against the United States."
Assistant U.S. Attorney Winston Holliday called that argument "the nail in the coffin" in his request to revoke the bond.
Brunson, McQueen and Pough handed over money, jewelry and neckties over to supporters seated behind them in the courtroom. Led out of the courtroom by federal marshals, they exited without commenting to reporters.
Before leaving, Brunson turned to whisper to supporters, "We don't walk by sight. Don't walk by what you see. Walk by what you know."
Outside the courtroom, Brunson's wife expressed disbelief at her husband's fate.
"I'm completely shocked, because of the complete and total injustice," Isolde Brunson said.
Attorneys for all three men declined to comment on the verdict or if they were making plans to appeal it. The men face decades in prison and millions of dollars in fines.
As for the money in forfeiture, court-appoint receiver Beattie Ashmore said Friday his team is still searching for missing assets and need prospective victims who are seeking relief to fill out a proof of claim form.