HONOLULU—Following a 25-day trial spanning over seven weeks, a federal jury yesterday found George Lindell, 67, and Holly Hoaeae, 40, both formerly of Maui, guilty of eight mail fraud and two wire fraud charges in connection with their operation of a multi-million-dollar Ponzi scheme associated with their mortgage and insurance business on Maui. Lindell was also convicted of four counts of money laundering.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to evidence produced in court, 166 people invested over $26 million in an investment scheme called “The Parking Lot” and lost a net amount of $8.9 million dollars. Lindell and Hoaeae began an investment scheme in connection with their operation of their business “The Mortgage Store,” in which they issued promissory notes promising to pay a guaranteed rate of return of seven percent. Lindell and Hoaeae, using radio ads, magazines and a weekly radio show, urged potential investors to attend their weekly workshops at “The Mortgage Store” where they taught seminars on how to “harness” or use the equity in their homes for investment purposes. Lindell and Hoaeae would then utilize their status as mortgage brokers to refinance investor residences in order to extract the equity in investor homes for the purposes of investment.

According to the information revealed in court, Lindell and Hoaeae would then urge investors to invest money in their investment scheme, known as “The Parking Lot”, where investors could “park” their money and earn guaranteed rates of interest. Lindell and Hoaeae advertised the Parking Lot as “safe” and invested largely in secure corporate bonds in Fortune 500 companies. In truth and fact, Lindell and Hoaeae were investing in “junk” bonds and/or marginal real estate investment activity and using the remainder of the funds to support their luxurious lifestyles and pay existing investors with new investor funds. During the scheme Lindell built a $3.5 million dollar residence above Lahaina in large part with investor funds and Hoaeae used hundreds of thousands of dollars in investor funds to support her personal lifestyle including trips, automobiles and payments of extensive credit card debt.

Lindell and Hoaeae will be sentenced on September 9, 2015 by United States District Judge Derrick K. Watson. Lindell and Hoaeae face up to 20 years in prison on each of the ten mail and wire fraud offenses. Lindell also faces up to ten years in prison on each of the four money laundering offenses. Each charge also carries a potential fine of up to $250,000.

The investigation of this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorneys Ken Sorenson and Andrea Hattan.