News From Terre Haute, Indiana

Local & Bistate

June 30, 2009

Ex-pastor, sons face 10 felony counts in Sullivan

SULLIVAN — A former Sullivan pastor and his sons now face 10 separate felony counts in violation of the Indiana Securities Act for an elaborate fraud that allegedly bilked millions from investors.

Charges against Vaughn Reeves and his sons, Chip, Chris and Josh, were filed Tuesday in Sullivan Circuit Court by Prosecutor Robert Hunley II. The case is the result of a collaborative investigation of Alanar Inc. that was supported by the Secretary of State’s Prosecution Assistance Unit and the Indiana State Police.

Each of the Reeveses could face up to eight years in prison on each class-C felony charge if convicted.

As Secretary of State Todd Rokita joined Hunley on Tuesday at the Sullivan County Courthouse to announce the filing of the charges, word came that one of the men, Chip Reeves, had been taken into custody by U.S. Marshals.

Applause erupted among some of the people in the courtroom who said they were victims of the alleged Ponzi scheme and had lost the money they invested in Alanar Inc.

Later Tuesday, Chip Reeves was taken to the Sullivan County Jail, where, according to a jail spokesperson, his bail was set at $1.5 million, no 10 percent allowed.

All four men moved out of Indiana when the company was put into receivership as, investigators say, the financial scheme fell apart.

“This case goes far beyond simple theft,” Rokita said. “The Reeveses allegedly targeted their victims through their faith, and then exploited their religious convictions in order to hide their elaborate Ponzi scheme from potential investors.”

Chip Reeves, 44, was last known to live in Milford, Ohio. His father, Vaughn Reeves, 65, was last known to live in Louisville, Ky. The most recent known address for Chris Reeves, 40, was Bardstown, Ky. Josh Reeves, 33, had lived in Bettendorf, Iowa.

Hunley said that U.S. Marshals have been looking for the men in anticipation of the charges.

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    March 12, 2010