Fleecing The Flock - Holy Roller Took Christians For $25M
Pastor Dale Morgan
Fleecing The Flock - Holy Roller Took Christians For $25M*
SANTA ANA, Calif., May 2, 2008(AP) Federal investigators arrested a man
Friday on a charge of wire fraud and alleged he ran a Ponzi scheme that
netted more than $25 million by targeting Christian investors nationwide.
Jon G. Ervin, 61, of Mission Viejo, was named Thursday in a criminal
complaint filed in U.S. District Court in Santa Ana. A federal
magistrate set bail at $1 million during a brief court appearance Friday
and Ervin was not immediately released.
Ervin's public defender, Leon Peterson, didn't immediately return a call
for comment.
The U.S. Securities and Exchange Commission and the Commodity Futures
Trading Commission also filed lawsuits against Ervin and his company,
Safevest LLC, on Thursday and obtained federal orders freezing their assets.
According to the criminal complaint, Ervin used Safevest to persuade
victims to invest in a fake commodity futures trading program. Investors
were told Safevest would use no more than 13 percent of their deposit in
hundreds of commodity trades a day on the Chicago Mercantile Exchange,
with a guarantee of up to 1 percent in returns each day.
Investors could check their returns on a password-protected Web site
that was run exclusively by Ervin. The program attracted about 550
investors, officials said.
Investigators alleged, however, that Ervin didn't invest any of the
money in commodities trading and instead spent $1 million of the money
to invest in a Georgia golf course. He also bought a sport utility
vehicle and spent lavishly on air travel, gourmet meals and shopping,
said Thom Mrozek, spokesman for the U.S. attorney's office.
Up to 80 percent of investors were churchgoing Christians and many
joined the program after being approached by fellow worshippers through
a referral system, according to court papers.
Those who referred others in their church would receive a 10 percent
"referral fee" from the profits of the new members they solicited;
pastors were required to make an initial investment of $5,000, while
non-pastors had to put down $25,000, according to federal documents.
Investment materials included the resume of an Arlington, Va., pastor,
the Rev. John V. Slye, who was listed as one of the founders of the
National Center for Cancer Research and a prominent fundraiser for
charities.
The SEC complaint states that Slye was the chief executive and co-owner
of Safevest and was a signatory on several accounts, but Mrozek said
Slye has not been charged in the criminal case because it's unclear how
much he knew about the operation. Investigators have also not determined
if all the information on Slye's resume was accurate.
"Basically, what you have here is a scheme that is being orchestrated by
Ervin," Mrozek said. "There are people who are wittingly or unwittingly
assisting him, and we're still trying to figure out who knew what, and
when."
A Web site for Grace Community Church in Arlington, Va., lists a John
Slye as pastor. Slye didn't immediately return a message left at his
office and did not respond to an e-mail.
Ervin eventually returned about $18 million to investors who grew
concerned and asked for their money back, but the rest was never
recovered, Mrozek said. Ervin would dodge investors' phone calls or
delay returning the money through a series of excuses, the criminal
complaint said.
Assistant U.S. Attorney Jennifer Waier, who is prosecuting the case, was
traveling and unavailable for comment Friday.