U.S. District Judge David Ezra called Perry Jay Griggs a serial fraud artist Friday before sentencing him to seven years and three months in prison for mail and wire fraud in a Ponzi scheme involving Hawaii inmates and their families.
"This defendant has flouted the law in the most profound way," Ezra said.
Griggs was serving time in prison at Nellis Air Force Base for operating a Ponzi scheme in California when he started the Ponzi scheme involving the Hawaii inmates and their families. He owes the victims from the first Ponzi scheme more than $3 million.
He also has convictions in Washington state for running a carpet business scam, a telephone scam while under investigation for the carpet business scam and for taking $3,000 from a contractor for a carpet installation he never performed.
Griggs told the victims who showed up for his sentencing in federal court Friday that he’s sorry for stealing their money and promised to pay them back. He said he started out hoping to make money for them and himself but that the business and investments went bad.
Nohea Colton, who gave Griggs and his wife $700,000 in what turned out to be a Ponzi scheme, said she thought Griggs’ statements were "full of bull."
Ezra also ordered Griggs to repay his victims the $1.9 million that Griggs and his wife stole from them.
Ezra sentenced Rachelle Griggs to four years in prison Wednesday.
Federal prosecutor Les Osborne said Perry Griggs "has spent his entire life taking advantage of others, stealing their money."
The Griggses persuaded the Hawaii inmates and their families to refinance their mortgages and empty their retirement and savings accounts to invest in what they said was a commodities trading company for guaranteed returns, according to federal court records. They also helped Kapua Keolanui, the wife of a Hawaii inmate, set up her own "investment" company, which paid money into their own Ponzi scheme.
The government says the Griggses collected $3 million, used $1.1 million to pay "returns" to their investors and sent $467,000 to Keolanui to pay off her "investors." The Griggses also invested $775,000, losing all but $130,000, and spent the rest on themselves including $1 million on luxury car leases, rent for a house on Hawaii Loa ridge, a private jet charter and jewelry.
Keolanui pleaded guilty to wire fraud in November and is scheduled for sentencing next month.
