Archive for Wednesday, September 22, 2004

Local woman pleads guilty to 3 charges in fraud case

September 22, 2004

A Tonganoxie woman, who was scheduled to stand trial this week on charges that she was running a $1.2 million Ponzi scene, has pled guilty to three felonies.

Last Wednesday, Carla Jean Meyer Senger pled guilty to selling securities as an unregistered broker-dealer, selling unregistered securities and securities fraud.

Sentencing is set for 1 p.m. Nov. 5 in Leavenworth County District Court.

Senger originally was charged with illegally selling securities between June 1999 and September 2000 and sold securities as an unregistered broker during that time.

She also faced 31 other charges, which alleged she used false or misleading statements to sell stocks, limited partnership interests and investment contracts to eight northeast Kansas residents. The investors lost about $358,000, according to Fran Brunner, associate general counsel in the state securities commissioner's office.

In a Ponzi scheme, early investors in a venture are paid with investments from later investors.

As part of the plea agreement, Senger was ordered to pay restitution of $103,084 to five victims: an Overland Park man, a Tonganoxie woman, a Shawnee woman and two Basehor men. Restitution amounts would be reduced by any monetary recovery the victims receive from any civil court proceedings. As part of the plea agreement, Senger agreed not to have any contact with the victims in the case.

¢ Ponzi schemes are illegal pyramid schemes named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp scheme in the 1920s.

¢ Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons.

¢ Ponzi told investors he could provide a 40 percent return in 90 days compared with 5 percent for bank savings accounts.

¢ Ponzi was deluged with funds from investors. Though a few early investors were paid to make the scheme look legitimate, an investigation found Ponzi had only purchased about $30 worth of the international mail coupons.

¢ Today, Ponzi schemes continue to work on the "rob-Peter-to-pay-Paul" principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.

According to Brunner, Senger would offer to sell a stock or a security to a potential investor, but she would not actually purchase the stock or security.

Senger also is known by several other names, including Carla Jean Garry-Meyer, Carla Jean Garry and Carla Jean Meyer, according to court documents.

Brunner said the securities commissioner took administrative action against Senger in October 2001. That action ordered Senger and Business Concepts to stop violating the state's securities laws.

Because the three charges that Senger pled guilty to involve $25,000 or more, Brunner said, the case is a "presumptive prison case." That means that the judge, during sentencing, starts with the assumption that Senger will go to jail, and it's up to her to show the judge that she should not serve time in prison.

The securities commissioner's office would argue that Senger should spend time in custody, Brunner said.

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