BULLETIN: American, Canadian Indicted In Alleged Ponzi Scheme Involving More Than $129 Million; Jacquline Hoegel, William Wise Charged In San Francisco

BULLETIN: Jacquline Hoegel, an American living in American Canyon, Calif., has been charged criminally in an alleged Ponzi scheme that gathered $129.5 million, the office of U.S. Attorney Melinda Haag of the Northern District of California said.

Also indicted was William Wise, a citizen of Canada. Wise, 62, formerly resided in Raleigh, N.C.  A warrant has been issued for his arrest, prosecutors said.

Hoegel, 55, made an initial appearance before U.S. Magistrate Judge Carolyn Delaney in Sacramento, and was released on bond, prosecutors said.

The case flowed from an SEC civil prosecution brought in March 2009. Hoegel and Wise now have been charged criminally with conspiracy, mail fraud and wire fraud for their actions involving the sale of CDs issued by Millennium Bank, United Trust of Switzerland and Sterling Bank and Trust.

Hoegel also has been charged with four counts of making and subscribing a false tax return, one count of obstruction and one count of false statements, and Wise also has been charged with money-laundering, prosecutors said.

“The CDs issued by Millennium Bank, United Trust of Switzerland and Sterling Bank and Trust all promised CD purchasers guaranteed rates of returns — sometimes over 16 percent — that were allegedly based on overseas investments,” prosecutors said.  “In fact, CD purchasers’ funds were not used for overseas investments that generated the promised returns; the funds were instead used to enrich Wise and Hoegel and to make interest payments to earlier CD purchasers.”

When the SEC brought the civil case three years ago, customer losses were estimated at $75 million. More than 1,200 investors were affected by the scheme, which was unraveled by the IRS, the FBI and federal prosecutors in the Northern District of California and the Eastern District of North Carolina, Haag’s office said.

The 23-count indictment was returned under seal Feb. 21. It was unsealed after Hoegel’s arrest yesterday, prosecutors said.

In 2009, the SEC said the CDs “purportedly offered returns that were up to 321 percent higher than legitimate bank-issued CDs.”