A federal grand jury indicted a Hawaii man and his daughter for carrying out a Ponzi scheme that took in more than $8 million from unsuspecting investors. George Lindell, 65 , and Holly Hoaeae, 39, charged with thirteen counts of mail fraud, three counts of wire fraud, and one count of conspiracy to commit money laundering. Each of those counts carries a statutory maximum sentence of twenty years' imprisonment, as well as criminal monetary penalties.
According to authorities, Lindell and Hoaeae operated the Mortgage Store, which solicited potential investors, many of whom were Maui residents, to invest in what the pair called the "parking lot," which promised to pay interest above that being paid by financial institutions. Investors were told that their funds would be invested in safe investments such as bonds. Additionally, Lindell and Hoaeae used the Mortgage Store to refinance investor mortgages for amounts well in excess of their existing mortgages. In total, investors entrusted over $8 million to the pair.
However, Lindell and Hoaeae engaged in little legitimate business, and instead used incoming investor funds to pay existing investors in a classic Ponzi scheme. The majority of investor funds were used for personal expenditures for the pair, including the construction of a residence in Lahaina, Maui, the purchase of a Lexis automobile, payment of a $27,967 debt on a truck loan, and payment of $28,500 for a New Zealand safari.
The Mortgage Store had filed for bankruptcy in September 2010, listing debts of more than $10 million. Lindell and Honaeae agreed to surrender $6 million that was obtained from the scheme in a settlement with the bankruptcy trustee. In a sign that criminal charges might be pending, Lindell agreed in the settlement agreement that some of the transactions were made "with an actual intent to hinder, delay or defraud creditors of The Mortgage Store."