comscore 2 former Maui residents sentenced for $26M Ponzi scheme | Honolulu Star-Advertiser
Top News

2 former Maui residents sentenced for $26M Ponzi scheme

Two former Maui residents were sentenced today for their roles in a $26 million Ponzi scheme.

George Lindell, 68, was sentenced to 17 years and six months in prison. Holly Hoaeae, 41, received 10 years.

In May 2015, a federal jury found Lindell and Hoaeae guilty of eight counts of mail fraud and two counts of wire fraud. Lindell was also convicted of four counts of money laundering.

Both defendants were ordered to pay $8.9 million to the victims of the scheme.

According to evidence presented in court, the two built an investment scheme in connection with their business, “The Mortgage Store,” promising to pay a guaranteed rate of return of 7 percent.

Prosecutors said the defendants used radio ads, magazines and a weekly radio show to lure potential investors to attend their weekly workshops, where they taught seminars on how to use the equity in their homes for investment purposes. Lindell and Hoaeae would then used their status as mortgage brokers to refinance investor residences in order to extract the equity in investor homes for the purposes of investment.

Lindell and Hoaeae would then urge investors to invest money in their investment scheme, known as “The Parking Lot,” where investors could “park” their money and earn guaranteed rates of interest, prosecutors said. Lindell and Hoaeae advertised the Parking Lot as “safe” and invested largely in secure corporate bonds in Fortune 500 companies.

However, according to prosecutors, Lindell and Hoaeae were investing in “junk” bonds and marginal real estate investment activity and using the bulk of the funds to support their luxurious lifestyles and pay existing investors with new investor funds. While the scheme was in operation, Lindell built a $3.5 million residence above Lahaina in large part with investor funds and Hoaeae used hundreds of thousands of dollars in investor funds to fund her personal lifestyle including trips and automobiles and to pay extensive credit card debt, prosecutors said.

The case was investigated by the Federal Bureau of Investigation and prosecuted by assistant U.S. attorneys Ken Sorenson and Andrea Hattan.

Comments (5)

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines.

Having trouble with comments? Learn more here.

Leave a Reply

Click here to see our full coverage of the coronavirus outbreak. Submit your coronavirus news tip.

Be the first to know
Get web push notifications from Star-Advertiser when the next breaking story happens — it's FREE! You just need a supported web browser.
Subscribe for this feature

Scroll Up