INDIANAPOLIS (AP) — The last refund checks to devout investors who lost millions of dollars in what amounted to a religious Ponzi scheme are ready to be mailed after being tied up in court for nearly a decade.
Court-appointed receiver Michael Rusnak said Wednesday that about $2 million in repayments is expected to be mailed by Sept. 15 to investors in Alanar, an Indiana brokerage that scammed investors into buying bonds to help churches, which were also scammed.
It’s the final installment in about $60 million in repayments to more than 6,000 people, many of whom sank their life savings into the company. Most of them have gotten back about half of their money.
“It’s something that just goes on so long, I think everyone is glad to see it over,” Rusnak said a few days after a federal judge approved the plan for final distribution.
The case has dragged on since 2005, when the government froze the assets of the brokerage based in Sullivan — a city of about 4,000 that’s some 80 miles southwest of Indianapolis — and began the lengthy process of finding investors across the U.S. and paying them back.
Former pastor and Alanar founder Vaughn Reeves Sr. was convicted in October 2010 of securities fraud and sentenced to 54 years in prison. He is not eligible for release until 2035, according to the Indiana Department of Correction website.
Investigators say Reeves and his sons assembled teams of church members to sell bonds to other church members, urging them to fulfill their “Christian responsibility” by supporting construction projects.
Authorities said Reeves and his three sons duped investors, then spent millions of dollars on themselves. Two of the sons have completed their time in prison; the third was ordered to pay back nearly $500,000 without prison time.
Alanar essentially took money from one pot of investments and put it into another pot to cover its losses, so some investors — about 1,700 of them — wound up getting back all of their investment, Rusnak said.
The rest didn’t, because the churches they invested in weren’t able to cover the bonds Alanar issued; those people have recouped about half.
Some churches were kept open, but the receivership had to foreclose on a handful in order to repay investors, Rusnak said.
“Believe me, it’s painful,” Rusnak said. “Sometimes, we had no choice.”
About $633,000 in unclaimed money will go to the Indiana attorney general’s unclaimed property service, as will any checks that are not cashed within 60 days of the issue date.
If anyone suspects they may be owed money from Alanar, the receivership has set up a website with a list of unfound recipients.