4 Ponzi Probes Spotlighted In Seattle; Cases Involve ‘Phony Business Plans’ With Sports Tickets, Point-Of-Sale Machines, Oil Fields, Aircraft Parts

EDITOR’S NOTE: If you’re keeping a “Bubba Blue” notebook on the various ways to serve up a Ponzi scheme — as opposed to shrimp — these Ponzi investigations in Washington state might deserve an entry. The story below encapsulates four major cases. It also includes a link to the charging document in the Rhonda Breard Ponzi case, a fifth major probe in the Seattle area. The Breard case is not summarized below. We’ll publish a separate story on it in the future.

Two new Ponzi schemes have emerged in Greater Seattle, and two other cases continue to be untangled, federal prosecutors said. The four cases combined involve more than $80 million, according to records.

James Liddell, 55, of Seattle, remains at large after being indicted last week. Prosecutors said Liddell was indicted for a scheme in which he persuaded 13 investors to hand over a total of $3 million for his purported business of refurbishing point-of-sale machines and selling them to a drug-store chain.

Liddell operated a company known as Payright Merchant Services, and showed investors “forged sales agreements and purchase orders” to pull off the scheme, prosecutors said.

No machines were ever bought or sold to the Seattle retailer, and there were no contracts for any such sales, according to the indictment. Some of the money was used to pay “returns” to earlier investors, but Liddell used $1.2 million for his own benefit, prosecutors said.

Read the Lidell indictment.

Separately, Lorenzo V. Molina Jr., 49, of Sammamish, was indicted in a Ponzi case in which he is accused of telling investors his company rehabilitated aircraft parts through third-party vendors and sold the parts at a profit to airlines.

Molina formerly worked for Boeing, but his purported parts business was a sham that gathered $3.6 million from investors duped by fraudulent documents, prosecutors said.

About $1.7 million was returned to investors, but Molina “used the rest of the money for things such as a grand piano, private school tuition for his children, horses and real estate in Issaquah, Maple Valley, Fall City and Arizona,” prosecutors said.

Western Washington’s top federal prosecutor said the Molina and Liddell schemes worked because they were targeted at friends and neighbors.

“As these indictments demonstrate, Ponzi schemes are not limited to financial advisors,” said U.S. Attorney Jenny A. Durkan. “Investment brokers such as Bernie Madoff and Rhonda Breard make headlines, but in these cases it was literally ‘the guy next door,’ who bilked friends and neighbors. Each took in millions for a purported business plan, and then fraudulently used the money for his own benefit.”

Read the Molina indictment.

Durkan provided updates on two other Seattle-area cases.

Kevin A. Halverson, 51, of Bothell, was indicted in February on charges of running a Ponzi scheme involving “high profile” sports tickets and tickets for other major events. Venues for the ticketing scheme included the Super Bowl, the Indianapolis 500, concerts and shows in Las Vegas, according to court records.

The scheme collected $10 million. Prosecutors said Halverson “purchased a small number of tickets to make the business appear legitimate, but primarily used investor money to pay off earlier investors in the manner of a typical Ponzi scheme.”

Read the Halverson indictment.

Meanwhile, the Robert Miracle Ponzi scheme case also is proceeding, with sentencing set for October. Miracle, 49, of Bellevue, has pleaded guilty to mail fraud and tax evasion in a scheme involving Indonesian oil wells.

“Miracle represented to investors in his companies that they were making money from oil field development and services on oil and gas fields in Indonesia,” prosecutors said. “In fact, the proceeds of later investors were used to pay off the investments of earlier investors.

“Between September 2004 and October 2007, Miracle took in more than $65.3 million and paid out $36.7 million as dividends to investors. The remaining [money] — some $28.6 million — was used in part for efforts to develop oil and gas on fields in Indonesia, as well as to pay for a lavish lifestyle for Miracle and his cohorts,” prosecutors said.