Directors of Company in La Grande Plead Guilty to Federal Money Laundering Charges Thousands of North American Investors Lose Millions of Dollars
| U.S. Attorney’s Office June 09, 2009 |
PORTLAND, OR—Bryant E. Behrmann, 63, pled guilty in federal court today to money laundering. Last week, on June 5, 2009, Larry “Buck” E. Hunter entered a guilty plea to federal money laundering in the same case. Both guilty pleas were accepted by U.S. District Judge Anna J. Brown. The guilty pleas were entered in connection with a scheme to defraud thousands of investors through Hunter and Behrmann’s company, Global Online Direct. Money laundering carries a maximum penalty of 10 years in prison and other financial penalties. Sentencing is scheduled before Judge Brown on August 31, 2009 at 9:30 a.m.
According to a criminal information filed against Hunter and Behrmann, in 2005 the defendants founded a company known as Global Online Direct. Global’s headquarters of operations were in La Grande, Oregon. Hunter and Behrmann were the officers and directors of Global. From 2005 through 2007, defendants marketed Global as a company that purchased distressed inventory and then purportedly resold that inventory for profits through flea markets, street sales, retail storefronts, and internet auctions. Global’s website falsely promised investors that “each dollar loaned to Global Online Depository is SECURED by tangible product inventories stored in our own warehouses.” Global’s website also promised investors referral fees and annual returns that could exceed 1,500%; however, according to the criminal information, those returns were fabricated by defendants.
Global did not have sufficient inventory to “secure” investor funds. Similarly, Global’s business model and company performance could not and did not generate profits needed to pay the returns promised to investors.
“This multi-million dollar Ponzi scheme was inspired by greed,” stated United States Attorney Karin J. Immergut. “Hunter and Behrmann lied to investors and stole millions of dollars to enrich themselves, their families and their friends. Thanks to the hard work of federal prosecutors, the FBI, IRS Criminal Investigation, and U.S. Postal Inspection Service, this house of cards was destroyed before more investors could be duped.”
Both Hunter and Behrmann were subject to multiple cease and desist orders issued by various state administrative agencies, which prohibited them from selling securities in several states based on previous misrepresentations to investors. For example, in 1996 the Oregon Department of Consumer and Business Services ordered Hunter to stop offering or selling securities in the State of Oregon in violation of state law. Furthermore, Behrmann held himself out to Global investors as a judge. In fact, Behrmann was a magistrate judge in Idaho over 20 years ago, but he was suspended from the practice of law by the Idaho Supreme Court in 1999, and he has never been reinstated as a member of the Idaho State Bar.
Over 8,000 investors from Oregon, numerous other states, and Canada, sent over $40 million to Global. Contrary to Hunter and Behrmann’s claims that the investors’ money was secured by product inventory, Global purchased less than $3 million in inventory over the life of the company.
Although some early investors in Global received money back from Global when they made investment withdrawal requests, such returns were paid out of funds provided by later investors, not from Global’s sale of product inventory. Hunter and Behrmann misappropriated millions of dollars from Global's investor funds for their own personal use and for the personal use of their family and close associates. Specifically, defendants traveled to Europe and Asia, bought SUVs, trucks, and cars, and purchased multiple residences and other property for their own personal use and for the personal use of their family – all with funds from Global investors.
The money laundering charges to which Hunter and Behrmann pleaded guilty stemmed from the two defendants using Global investor funds to purchase personal residences for their family members in Oregon and Nevada.
Most of Global’s investors never received their money back, nor did they receive the interest that Hunter and Behrmann’s company had falsely promised them.
This case was jointly investigated by the FBI, IRS Criminal Investigation Division, and the U.S. Postal Inspection Service. Assistant United States Attorneys Amy Potter and Craig Gabriel are prosecuting the case.