Ventura County Ponzi scheme perpetrators sentenced to federal prison
May 21, 2013
Three Ventura residents were sentenced to federal prison on Monday – with one defendant being ordered to serve more than 17 years – for their roles in a Ponzi scheme that caused losses of more than $27 million.
The three defendants – two brothers and a woman, all of whom shared a house in Ventura – fraudulently raised money by telling victim-investors that funds would be used to purchase Ad Toppers, a video device that can be placed on ATMs or vending machines and used to display advertisements.
Alan G. Flesher, 65, the leader of the scheme, was sentenced to 210 months in federal prison; Wayne D. Flesher, 62, Alan’s brother, was sentenced to 72 months in prison; and Nancy Carol Khalial, 65, who was sentenced to 48 months in prison.
United States District Judge Terry J. Hatter Jr. also ordered the defendants collectively to pay $27,377,470 in restitution.
Even though the scheme took in approximately $41 million from approximately 790 victim-investors from approximately 2001 to 2005, the defendants did not place most of the ATMs and Ad Toppers sold to investors.
“In other words, defendants sold nonexistent ATMs and Ad Toppers and paid the later investors with the funds from the earlier investors,” prosecutors wrote in court documents filed in relation to today’s sentencings.
The defendants used the majority of investor funds to pay personal expenses and to continue operating the fraudulent scheme by paying personal salaries, sales commissions and by making Ponzi-style payments.