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October 10, 2010

Ex-Valley pastor’s Ponzi scheme trial to start Tuesday

TERRE HAUTE — A jury trial begins Tuesday for a former Sullivan County pastor accused of bilking investors of millions of dollars in a Ponzi scheme.

Vaughn Reeves Sr. goes on trial at 9 a.m. Tuesday in the Gibson County Courthouse at Princeton. He has pleaded not guilty to 10 felony counts of affinity fraud through the former company Alanar Inc.

Tuesday’s trial begins with selection of a 12-member jury. If jury selection is completed early enough on Tuesday, the trial could move into opening statements from the prosecution and defense teams.

Special Judge Dena Martin has blocked out three weeks for the trial, though it could be completed in less time.

Reeves and his three sons, who worked at Alanar with their father, were arrested in 2009. Each man was charged with 10 counts of securities fraud, a class-C felony, for allegedly bilking millions of dollars from investors in an elaborate Ponzi scheme built on money intended for church construction projects.

The trials for the three sons remain scheduled for next year. Vaughn “Chip” Reeves Jr. has a Jan. 31 jury trial in Gibson County. Josh Reeves has a March 21 jury trial in Daviess County. Jonathan “Chris” Reeves has a May 3 jury trial in Martin County. All three men have also entered not guilty pleas.

The charges allege the men duped about 11,000 people into buying bonds that raised at least $120 million for church construction projects. Investigators say the men shuffled invested money among various accounts and stole about $6 million for themselves in the process.

Allegations suggest the father and sons engaged in the scheme over the course of at least five years by illegally moving money and concealing the true rate of default on Alanar bonds from investors.

After a lengthy investigation into the company’s activities, Sullivan County Prosecutor Robert Hunley and Indiana Secretary of State Todd Rokita announced filing of the criminal charges June 30, 2009, alleging securities fraud that occurred between September 2000 and July 2005. All four defendants turned themselves in to authorities soon after charges were filed. They have all been held in the Sullivan County Jail to await trial.

Any time that they have spent in jail awaiting trial can be credited to any prison sentence that might be imposed if they are convicted in their cases. A class-C felony is punishable by 2-8 years in prison, with an advisory sentence of four years.

Lisa Trigg can be reached at (812) 231-4254 or lisa.trigg@tribstar.com.

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