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Sunday
Sep112011

Arizona Man Indicted in $6.3 Million Ponzi Scheme

A Phoenix man was charged with sixty-seven felonies in what authorities allege was a Ponzi scheme that defrauded investors out of over $6 million.  Jeffrey Paul Navin, 52, of Phoenix, was accused of selling fraudulent certificates of deposit to senior citizen investors, falsely representing that the CD's were FDIC insured.  He was charged with forty-five counts of mail fraud, eight counts of false personation, and fourteen counts of money laundering.  Both wire fraud and money laundering carry a maximum prison sentence of twenty years per offense, while false personation carries a maximum sentence of three years per offense.  

Navin created or used a multitude of entities to market fictitious CD's to potential investors, including BankNet, Nationwide Banknet Services, Capital One Custodial Services, and WWI, Inc.  Navin also claimed that he was a licensed FDIC Broker and that the CD's were FDIC-insured.  At least seventeen investors placed money with Navin, with each losing at least $125,000.  In total, Navin collected $6.3 million from investors who thought they were purchasing government-insured securities.  Instead, authorities allege that Navin did not purchase a single CD, and that neither Navin nor the CD's were FDIC-insured.  Investors were provided with fictitious account documents, and Navin used the majority of investor funds for personal expenses and to make Ponzi-like payments to victims for interest and return of principle.

In addition to the criminal charges, authorities are seeking the forfeiture of any property traceable to Nevin's scheme.  According to court documents, Navin was released on his own recognizance and ordered to surrender his passport during the pendency of criminal proceedings.  

A Copy of the Indictment is here.