http://www.fayobserver.com/print?id=297459&type=articlePublished on Monday, June 23, 2008
‘3 Hebrew Boys’ indicted on 35 counts of mail fraud
A staff and wire report
COLUMBIA, S.C. — The three men, claiming to have been rescued from financial ruin by divine intervention, went to homes and churches across North and South Carolina, including Fayetteville, spreading tales of financial rescue.
With an investment of just pennies on the dollar, they promised an end to credit card debt, mortgages and hefty car loans.
A number of investors were recruited at churches and hotels in Fayetteville, court documents say, as the men targeted servicemen and people in debt.
And word of the “3 Hebrew Boys” spread. Small meetings in living rooms grew to fill church meeting halls and hotel ballrooms, with followers wooed, authorities now say, by promises of huge returns from investments in foreign currencies.
Tony Pough, Timothy McQueen and Joseph Brunson — three men who attend church together — created their endeavor in 2005 and named it after a tale in the Bible of three people who were thrown into a fiery furnace but spared because of their faith in God. Stories of their investment plan spread quickly thanks to believers who recruited new clients on military bases and in churches.
By the time authorities moved in, at least 7,000 investors from two dozen states had handed over $80 million. But barely any of it was invested — less than $40,000, according to state and federal officials — while the men bought a jet, luxury cars and tickets to football games, court documents show.
A federal grand jury indicted the men on 35 counts of mail fraud Friday, and they were charged with securities fraud in state court in September. A judge has frozen $17 million the Hebrew Boys had in bank accounts and that money remains in limbo as the men await trial, which means investors aren’t able to collect any money until the case is resolved.
But some of their so-called victims have become their staunchest defenders, holding rallies in support of the men who face decades in prison if convicted.
“Most of the folks I know have total confidence and faith in these boys, and we have not seen anything that they have done wrong to cause what we’ve seen happen in the last year or so,” said William T. Ford, a pastor at Parks Chapel Freewill Baptist Church in Fayetteville.
He said he thinks authorities failed to find what they expected when they began looking into the program and don’t want to admit they’re wrong.
“All of the folks that I know who got involved with it are people of integrity, and they have total faith and confidence in the program,” Ford said.
One investor, Henry Lewis, said he had no problem until the state got involved. Lewis refused to say how much he invested but said the men kept every promise to pay him back before the money was frozen.
“I was looking for financial freedom. I’m tired of being in debt,” said Lewis, of Ladson.
Authorities said they aren’t surprised by the fierce defense of the men, in part, because they enlisted respected pastors, deacons and retired soldiers to help pitch the plan. They also relied on trust built around race — the three defendants are black, as are about 90 percent of their investors, authorities said.
“That’s the nature of a well-organized scam. You recruit highly regarded and trusted members of a specific community and get them on board to endorse your product,” said Mark Plowden, a spokesman for South Carolina Attorney General Henry McMaster.
The N.C. Securities Division took notice of the men in 2006 after a woman anonymously reported that she attended a meeting at Holiday Inn Bordeaux in Fayetteville, court records show. She was told that by investing she could receive 10 percent interest monthly for the rest of her life.
She said that the 3 Hebrew Boys held sessions in homes and churches that attracted up to 250 people, court documents say.
Investigators describe the case as a Ponzi scheme, in which early investors are generously rewarded when they recruit other investors. It is illegal to use money from those recruits, rather than real investments, to pay promised returns.
Topic: ‘3 Hebrew Boys’ indicted on 35 counts of mail fraud (Read 1802 times)