Posts tagged Ponzi Scheme
Ponchatoula man charged with running Ponzi scheme
By Jen DeGregorio, nola.com
November 19, 2009, 6:10PM
A Ponchatoula man has been arrested for running a Ponzi scheme in which he bilked at least 200 investors out of more than $11 million and allegedly used the money to pay for Mardi Gras krewe memberships and plastic surgery, among other personal expenses.
William J. Chaucer Jr. was booked in the Tangipahoa Parish Prison on charges of felony theft, selling unregistered securities, making material misrepresentations in the sale of securities and operating as an unregistered securities dealer, according to Attorney General Buddy Caldwell’s office, which investigated the case with the Tangipahoa Sheriff’s Office. Chaucer’s bond has not been set.
william_chaucer.jpgRoger Zettler, The Advocate/The Associated PressWilliam and Cheryl Chaucer were photographed in September 2008 at a banquet celebrating her selection as Miss Louisiana Senior America at Carter Plantation in Springfield, La.
Chaucer was the principal of several financial companies, according to Caldwell’s office: Chaucer Holding Company, Chaucer Financial Services, American Credit of Hammond, American Credit of Covington and City Credit of Ponchatoula. The companies closed in September.
A Ponzi scheme works by juggling money among a stream of investors, using cash from new clients to create the appearance of profits on existing accounts. In Chaucer’s case, clients were told that their money was being invested in one of his loan companies. Individual investments ranged from $10,000 to $417,000, according to Caldwell’s office.
But Chaucer was actually using the cash to bankroll an extravagant lifestyle. Caldwell’s office said Chaucer spent $400,000 on Mardi Gras krewe memberships and krewe-related expenses for his family, $5,500 in plastic surgery and $11,800 in cosmetic dental work for Cheryl Chaucer, who competed in beauty pageants. Chaucer also allegedly spent $5,558 for tickets and ads to the Senior America Inc. pageant, along with $14,275.74 in photos, $20,905.74 in jewelry and “thousands more dollars” on expenses related to his wife’s pageant career.
A telephone listed in the name of William Chaucer at an address in Ponchatoula has been disconnected. Donald Hyatt, listed with the attorney general’s office as an attorney for Chaucer, did not return several telephone calls seeking comment.
The Web site for Senior America Inc. lists Cheryl Chaucer as “Ms. Louisiana Senior America 2008.” A biography on the site describes her as a talented singer who has performed with the likes of Fats Domino, Pete Fountain and the Neville Brothers. Cheryl Chaucer is also credited with serving on the boards and committees of a variety of major New Orleans institutions, including the New Orleans Opera Association, New Orleans City Ballet and Audubon Zoo. The Web site also describes the Chaucers as members of five Mardi Gras organizations. Cheryl Chaucer has reigned as Queen of Mercury, according to the site.
She and her husband were scheduled to reign together as King and Queen of Excalibur in 2011, but the couple resigned from those posts in August citing “business problems,” said Diane Brown, captain of the Metairie parading organization.
Chaucer is not the first Louisianan charged with running a Ponzi scheme. In August, former Metairie resident Judith Zabalaoui received an eight-year prison sentence for operating a Ponzi scheme that stole $5 million from clients in the New Orleans area.
About 1,700 Louisianans may have lost a combined $500 million in investments with R. Allen Stanford, the Texas financier who has been charged with stealing $7 billion in an international Ponzi scheme. Stanford has pleaded innocent of the charge.