An Indiana man received an eighteen-year prison sentence for operating a Ponzi scheme that duped victims out of at least $1.5 million. Rudolf “Rudi” Pameijer, of Johnson County, Indiana, received the sentence from Johnson County Judge Mark Floyd, who also ordered Pameijer to pay $1.8 million in restitution to his defrauded victims. Judge Floyd suspended eight years of the sentence, meaning Pameijer will serve ten years of his sentence. Pameijer previously pleaded guilty in February 2014 to three securities fraud charges.
Pameijer held himself out as an expert financial advisor through his company, Plan America, LLC ("Plan America"), and also recruited investors for Rykoworks Capital Group, LLC ("Rykoworks") which was operated by Ryan Koester. In soliciting potential investors, Pameijer not only promised above-average rates of return but also guaranteed their initial investment. According to authorities, Pameijer also convinced some victims to surrender their existing annuities or utilize their retirement account to fund their investment. In total, Pameijer raised more than $1.5 million from at least twenty-four investors that included family and friends.
However, the returns promised to investors were funded not through Pameijer's trading prowess, but rather by funds from incoming investors in typical Ponzi scheme fashion. Pameijer also diverted investor funds for his own use, including sustaining a lavish lifestyle that included luxury cars, a 30-foot boat, his son's college tuition, and his daughter's wedding and honeymoon in St. Lucia.
The Securities and Exchange Commission initiated a civil enforcement action in September 2012 accusing Pameijer, Pameijer's daughter, and Koester of violations of federal securities laws. Authorities also filed criminal charges against Koester, who was recently sentenced to a two-year prison term for his role in the scheme.