Victims of 3 Hebrew Boys Ponzi scheme get back nearly half their money
The victims of an infamous South Carolina-based Ponzi scheme are getting back about 46 cents on every dollar they sent to a group known as the 3 Hebrew Boys.
Its an unusually large recovery. Typically, most of the money tied up in such financial swindles is lost.
U.S. Attorney Bill Nettles said a court-appointed receiver has issued 3,800 checks totaling $19 million to people with legitimate claims.
The receiver has worked aggressively to ensure that the victims ... received their fair share of what was recovered, Nettles said in a statement Wednesday.
The 3 Hebrew Boys were Tony Pough, 48; Joseph Brunson, 48; and Timothy McQueen, 53, all formerly of Columbia.
They all received harsh punishments in December 2010 for their roles in the fraud. Brunson and McQueen are serving 27-year prison terms. Pough is serving 30 years. They are appealing their 2009 convictions on 58 counts each of mail fraud, money laundering and other charges.
The men were charged with for masterminding a foreign-exchange investment program that turned out to be an elaborate Ponzi scheme, in which money from newcomers was used to pay off previous investors.
The name of the group came from the biblical story of three men thrown into an inferno after refusing to bow to a statue but emerged unscathed because of their faith. Prosecutors said they preyed on debt-plagued investors. The men said they were part of a ministry, telling people their investments would earn fantastic rewards that would pay off their debts. At least 7,000 people from dozens of states bought into the ruse and mailed in about $80 million.
The men paid themselves salaries of about $1 million and spent more than $25 million, including on three Atlanta-area condominiums, luxury suites at football stadiums, a Gulfstream jet, limousines, a motorcoach and 20 acres in Orangeburg, prosecutors said at the trial.
Defense attorneys claimed those were investments that would make money for clients.
Some investors got their money back before the scheme collapsed.
Court-appointed receiver Beattie Ashmore has seized and sold off ill-gotten assets under a five-year effort to return some of the money to the victims.
We are pleased to be paying out 46 cents for every dollar invested an extraordinary recovery in the context of these types of schemes, Ashmore said.
In a $66 million Charleston-based fraud involving local economist Al Parish, victims on average recouped less than 14 cents on the dollar two years ago. Parish, a former Charleston Southern University economics professor, is about four years into a 24-year sentence in the same North Carolina prison that houses New York Ponzi schemer Bernie Madoff.
The Associated Press contributed to this report.