The last refund checks to devout investors who lost millions in what amounted to a religious Ponzi scheme are ready to be mailed after being tied up in court for nearly a decade.
Court-appointed receiver Michael Rusnak said about $2 million in repayments is expected to be mailed by Sept. 15 to investors in Alanar, an Indiana brokerage that scammed investors into buying bonds to help churches that also were scammed.
It's the final installment in about $60 million in repayments to more than 6,000 investors, many of whom sank their life savings into the company that used a religious sales pitch. Most of those investors got or will get back about half of their money.
The complex case has dragged on since 2005, when the government froze the assets of the brokerage based in Sullivan, a city of around 4,000 people about 80 miles southwest of Indianapolis, and began the lengthy process of finding investors and paying them back.
Alanar founder Vaughn Reeves Sr. was sent to prison and is not eligible for release until 2035.
Authorities said Reeves and his three sons duped investors into sinking money into bonds secured by church construction projects, then spent millions of dollars on themselves. Two of the sons have completed their time in prison; the third drew no prison sentence but was ordered to pay back nearly $500,000.
The group used prayers and Bible passages to convince about 11,000 investors to buy bonds worth $120 million secured by mortgages on construction projects at about 150 churches in 35 states, according to court documents. Instead, Reeves and his sons diverted money from new investments to pay off previous investors, pocketing $6 million and buying two airplanes, sports cars and vacations, investigators said.
The financial fallout left churches and nonprofits that had sold the Alanar bonds holding the bag from which the investors were repaid. Some of the more well-off churches were able to pay back all the money they owed, Rusnik said. The government worked out financial arrangements with others. A few churches were foreclosed on, though Rusnik said that was a last resort.