Print

Email story

Comment

Letter to the editor

Local link helped bring Ponzi schemers down

A ring of eight people scammed more than $170-million through a phony bank in the island nation of Grenada.

By CARRIE WEIMAR,Times Staff Writer
Published September 7, 2007

A Clearwater man's role in a worldwide phony investment scheme came to an end with the sentencing of the fraud's ringleaders last week.

Prosecutors say Clearwater resident Jonathan Kremner was one of eight people who promoted a bogus investment scheme that swindled thousands of victims out of more than $170-million.

He pleaded guilty and agreed to cooperate with authorities.

The defendants sentenced last week in Portland are all Oregon residents. They received prison terms ranging from 18 months to more than nine years.

Kremner, 44, was one of four people charged in the fraud who assisted authorities with prosecuting the ringleaders, said the Oregon U.S. Attorney's office. In a plea deal, Kremner admitted to selling an unlicensed security to a Florida resident and was sentenced to three years of probation.

Kremner could not be reached for comment.

Prosecutors said the far-ranging fraud was one of the largest and most devastating Ponzi schemes ever committed.

The defendants were indicted in October 2003 on conspiracy, fraud and money laundering charges stemming from the creation of the First International Bank of Grenada.

The bank, established in 1997, offered depositors interest rates as high as 300 percent. It claimed to have acquired assets of more than $26-billion. In reality, the defendants were using deposits to make phony interest payments to depositors and pocketed the remainder of the money.

When the bank was taken over by authorities in Grenada in August 2000, it had less than $2-million in real assets.

The defendants were prosecuted in Oregon because nearly $50-million from the scheme was laundered through a bank account there.

[Last modified September 6, 2007, 20:37:38]