Former Elizabethtown Business Operator Guilty in International Pyramid and Ponzi Scheme
Operated Multiple Businesses from Elizabethtown
|U.S. Attorney’s Office September 17, 2013|
LOUISVILLE, KY—The former owner of businesses operating in Hardin County, Kentucky pleaded guilty in United States District Court before District Judge John G. Heyburn, II today to charges of aiding and abetting with others in an illegal pyramid/Ponzi scheme and engaging in a conspiracy to commit mail fraud, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the plea agreement presented in court today, defendant Swainson Hawke, a/k/a Ronald D. Scheetz of Macon, Georgia, defrauded numerous investors through his control of an operation of Guardian International Travel LLC and related companies. Guardian International operated as both a pyramid scheme and a Ponzi scheme to defraud investors. Between February 1, 2005 and January 20, 2008, Hawke and co-defendant William A. Humes of Elizabethtown, Kentucky, devised a scheme to defraud and to obtain money from participants in multi-level marketing schemes promising inflated returns. Through businesses they owned and controlled, including Guardian International Travel LLC, Hawke admitted to inducing investors to purchase discount cards, ostensibly connected to the hospitality industry, creating the illusion that returns/payments were based on profits. In a Ponzi scheme, the fraud consists of paying funds received from new investors to previous investors in the guise of profits from the alleged business venture. Hawke assured returns on money received from participants varying from 300 percent to 500 percent, to be paid in scheduled installments over periods of time ranging from 18 to 29 months.
In the furtherance of a pyramid scheme, defendant Hawke offered participants significant financial incentives to recruit new investors by paying them “commissions.” New investors paid Guardian International Travel and other companies owned and or operated by Hawke for the right to financial rewards through recruiting new participants—a financial gain unrelated to the sale of a product.
Hawke and Humes were charged in a two-count federal grand jury indictment that was unsealed Thursday, June 30, 2011.
If convicted at trial, Hawke faced no more than 40 years in prison, a $500,000 fine, three years’ supervised release, as well as forfeiture to the United States government any and all property obtained as a result of the violations. Hawke is scheduled for sentencing before Judge Heyburn on January 7, 2014, at 2:00 p.m. in Louisville.
Defendant Humes is scheduled for trial in United States District Court, Louisville, before Judge Heyburn on January 14, 2014 at 10:00 a.m.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun, Special Assistant United States Attorney Jim Lesousky and was investigated by the Federal Bureau of Investigation (FBI) and the Kentucky Attorney General-Consumer Protection Division.