Two men were indicted Friday for allegedly operating a Ponzi Scheme in Kentucky. Swainson Hawke of Macon, Ga., and William A. Humes of Elizabethtown were each charged with conspiracy to commit mail fraud and aiding and abetting each other. If convicted, each faces up to forty years in prison, a $500,000 fine, and forfeiture of any property gained as a result of the offenses. The two men have pled not guilty, and are currently free on $10,000 bail.
Hawke and Humes operated several businesses, including Guardian International Travel LLC ("Guardian"), sold discounted gift cards to participants, who were then 'paid' commissions based on subsequent sales to investors. Participants in the scheme were given incentive to recruit as many new investors as they could, since the amount of compensation was directly tied to the quantity of solicited investors. Another business operated by the two, Pinnacle Concrete & Construction, was transferred to Humes in return for the sale of his interest in Guardian to Hawke. Authorities allege that Pinnacle was capitalized with monies raised in the scheme operated by Guardian.