2 men get 6 years each in scheme in Oregon that promised returns could top 1,500 percent
By: TIM FOUGHT
Associated Press
09/01/09 9:50 PM PDT
PORTLAND, ORE. — Two men have been sentenced to six years each for a scheme based in Eastern Oregon that promised returns topping 1,500 percent from sales of distressed merchandise through outlets such as eBay and flea markets.
Prosecutors say the two scooped up $40 million from investors but bought only about $3 million worth of goods for resale.
Much of the difference went for travel to Europe and Asia, luxury cars and real estate, say prosecutors. The two either spent the money themselves, or funneled it to relatives and associates, prosecutors said.
About 7,500 people from Oregon, numerous other states and Canada put money into the operation between 2005 and 2007.
Investors are expected to get back only "pennies on the dollar," said Amy Potter, an assistant U.S. attorney.
Some who got in early were paid returns from the money of later investors — the mark of a Ponzi scheme — but most got nothing, say prosecutors.
The two 63-year-olds, Bryant Behrmann and Larry "Buck" Hunter, pleaded guilty in June to money laundering charges in a plea deal that brought the sentences Monday.
They were ordered to pay more than $38 million in restitution.
But receivers last year reported recovering only about $2 million from the operation. That included the proceeds of a sale in Portland that netted $868,000 from merchandise such as tools, home furnishings, toys, fitness equipment, heavy machinery and automotive supplies.
"They've recovered only a little more since then," Potter said.
The two were accused of telling investors in Global Online Direct it would sell goods through online services such as eBay and through yard sales, flea markets and storefronts. The company bought buildings in La Grand and Union to handle the business.
Prosecutors said the two have histories of run-ins with state regulators: Hunter has been ordered in 1996 to stop selling securities in violation of Oregon law, and Behrmann was a magistrate judge in Idaho for more than 20 years who was suspended from practicing law by the state Supreme Court in 1999.
