Jury Convicts Recidivist Ponzi Man
DALLAS (CN) - A federal jury needed just six minutes Wednesday to convict a Texas recidivist in an $11 million Ponzi scheme.
Gary Lynn McDuff, 58, of Pasadena, Texas, was convicted of conspiracy to commit wire fraud and money laundering in Plano Federal Court. He faces up to 40 years in prison.
The jury wasted no time after a two-day trial before U.S. District Judge Richard A. Schell.
McDuff and two cronies lied to investors about putting their money in top rated bonds.
McDuff was sentenced to three years in federal prison for money laundering in 1994 and fled to Mexico, the SEC said in 2008.
McDuff's co-conspirator Gary Lancaster, 61, of Oregon, has been sentenced to prison.
His co-conspirator Robert Reese, of Carmel, Calif., is dead.
Working at Lancorp Investment Fund in West Linn, Ore., the men solicited investments from people across the country. McDuff claimed that the fund was properly registered and that Lancaster was a registered advisor, according to the indictment.
"While McDuff controlled the operation, Lancaster agreed to serve as the 'front' since McDuff could not possess a securities license or sell securities because of a past felony conviction," the U.S. attorney in Plano said in a statement. "McDuff recruited Reese to also sell the investment, despite the fact that Reese had been barred by the state of California from selling securities based on past fraudulent conduct."
All three men lied that the fund would invest only in A+ or A1 rated bonds, would be insured and the money would not be at risk, prosecutors said.
"McDuff, Lancaster, and Reese never disclosed McDuff's felony conviction or Reese's securities ban," the U.S. attorney said. "McDuff then laundered the criminal proceeds in order to promote the operation of the fraudulent scheme."
McDuff faces up to 20 years in federal prison on each count. His sentencing date has not been set.