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Three Accused In $11 Million Ponzi Scheme

DALLAS (CN) - Three men took $11 million in a Ponzi scheme that sold unregistered securities through the Lancorp Financial Fund Business Trust, the SEC says in Federal Court. The Commission says convicted felon Gary McDuff ran the scheme with Gary Lancaster and Robert Reese. Money in this case also turned up in the $9.4 million Megafund Corp. Ponzi scheme, the SEC says.

McDuff, 52, former of Deer Park, Texas, was sentenced to 3 years in federal prison for money laundering in 1994. The SEC says he has fled to Mexico.

Lancaster, 54, of Vancouver, Wash., was a registered securities representative until the NASD barred him in September 2006, the SEC says.

Reese, 65, of Carlsbad, Calif., is a licensed insurance agent. In 2004 the State of California ordered him to cease and desist acting as an unregistered broker selling unregistered securities.

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