9News.com (KUSA/Denver) Reports That Marlyn Hinders, Fugitive In $80 Million Genesis Fund Ponzi Scheme, Has Been Arrested

Marlyn D. “Milt” Hinders, a Colorado fugitive charged six years ago in the $80 million Genesis Fund Forex Ponzi scheme, has been arrested in Houston, 9News.com (KUSA) is reporting.

Hinders is 72. He was indicted in May 2005. A federal grand jury that had been impaneled in the Central District of California in 2003 accused him of being “one of the leading promoters and a manager of the Genesis Fund.”

The Genesis Fund scheme traces its roots at least to 1994 and presaged highly complex international Forex, HYIP and autosurf fraud investigations to come. The Genesis Fund fraud caper started in the United States, but then whisked itself offshore to Costa Rica and other countries when U.S. law enforcement began to close in, first by issuing subpoenas and later by convening a grand jury when evidence disappeared.

One of the figures in the case was a “co-conspirator lawyer from Costa Rica,” according to the indictment. Another was California attorney Victor Preston, who pleaded guilty in 2009 to defrauding the United States.

INTERPOL and authorities in Costa Rica assisted in rounding up at least three Genesis Fund defendants who’d ducked out of the United States. Five others were arrested in the United States, prosecutors said.

Hinders, who allegedly moved to Mexico in 2004 after subpoenas were issued and the grand jury was impaneled, was caught in Houston after a “tip” last month, KUSA reported. It is believed Hinders is the last of the nine defendants in the case to be rounded up.

Like the now-defunct AdViewGlobal autosurf, the now-defunct Genesis Fund purported to be an offshore “association” outside the reach of U.S. law enforcement, according to records.

Investigators followed the Genesis Fund paper trail “from the Caribbean to Hong Kong to Costa Rica and numerous other offshore locations,” according to a statement last year.

When the Genesis Fund Ponzi scheme collapsed, its operators “and their co-conspirators lulled the investors into believing that their investments would be recovered through a new investment plan,” the grand jury charged in an 83-count indictment.

It is common for investment fraud schemes to suspend payouts and then claim a new program will emerge to replace a failed one.

“Upon learning of the grand jury investigation, the defendants and their co-conspirators conspired to and did endeavor to obstruct the investigation by restructuring the Genesis Fund as a group of nominee offshore corporations,” the grand jury charged.

“This signals the new era of solving global financial fraud — the veil of offshore secrecy has been lifted and the IRS will do what is necessary to expand international cooperation to obtain financial evidence,” Victor S O. Song, chief of the IRS Criminal Investigation Unit, said last year.

Read earlier story on the Genesis Fund.

Read the Genesis Fund indictment.