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Court upholds former pastor's fraud sentence

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The Indiana Court of Appeals has upheld a 54-year sentence for a 67-year-old former pastor convicted of pocketing millions of dollars that investors believed would be used to build churches.

The court denied Vaughn Reeves' appeal Monday. He was convicted in October of nine counts of securities fraud.

Reeves had argued his sentence was too harsh. But the three-judge panel noted that Special Judge Dena Martin found Reeves defrauded about 2,900 people of more than $13 million, and that many of those people lost their entire retirement savings.

Reeves' three sons also were convicted on securities fraud charges involving the family's shuttered Sullivan-based church-bond company, Alanar.

Among aggravating factors, Martin also found Reeves targeted people over age 65 and used religion to influence them.

Alanar used a modified Ponzi scheme in which it diverted investors' money from building projects to speculative investments and to interest payments on other bonds, according to the Indiana Secretary of State's Office, whose Securities Division assisted prosecutors in the case.

Alanar encouraged church members to sell the bonds to fellow congregants using sales pitches that included prayers and Bible passages.

"Never sell the facts, sell warm stewardship and the Lord," Alanar training materials said.

Reeves' attorney's office did not answer phone calls seeking comment about thr appeal.

Reeves' sons, Joshua, Chris and Chip, reached plea bargains and received sentences ranging from six to 24 years.

The four men were arrested in mid-2009.

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  • Not a high interest
    Yes the company that took over salvaged and redid some mortgages and for that effort they were kinda rewarded. I assure you that from what I knew of the situation they had better things to do than taking this bag of worms over. There were indeed mortgages that were lost as well as people losing their life savings. I listen to preachers and politicians with one eye on them and the other on my billfold. I DO NOT TRUST EITHER OF THEM.
  • I was there.
    I was a Trustee for our church and rather than go to a BANK (THIEF) and have 18 members put up all of their homes as collateral as personal co-signers/guarentors I found Alanar and even drove down and met Vaughn. I spent a good deal of time doing my due diligence and still got our church caught in their fraud. As long as the church continued to pay the mortgage to the trustees people got their money back, no Intersted as promised. I felt fortunate to not lose everything. I am not sure they got enough time in Jail if they are even there.

    Buyer beware was not even a good indicator of the problem. My only concern that I voiced was there were waaaaaay too many relatives with conflicts of interest. Lesson learned.
  • who, where?
    i realize they used 5 to 6 million dollars for their own gain. the question is " who took control of the mortgages and what did they pay for the church mortgages?" pennies on the dollar for high interest mortgages. where is the crime? there was over 200 million in mortgages.

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