Independent prosecutor looking at conflict issues in Ponzi scheme

Posted: Wednesday, August 12, 1998

FAIRBANKS - A deadline is fast approaching for an independent prosecutor from Anchorage who was hired by the state to investigate potential conflict-of-interest issues in the World Plus investment scheme.

Attorney General Bruce Botelho wants Leroy Barker to provide a preliminary assessment before the Labor Day weekend about the involvement of several Department of Law employees who invested in RaeJean Bonham's Ponzi scam.

``He's been asked to look at the entire World Plus mess, follow all criminal leads and take charge of the full criminal investigations,'' Botelho told the Fairbanks Daily News-Miner.

Botelho said Barker alone will consider the evidence and determine whether anyone involved was engaged in criminal behavior.

``He's going to do it free from any directive that I or any lawyer would give him,'' Botelho said.

Bonham pleaded guilty recently to single counts of mail fraud and money laundering. Bonham convinced investors that their money was needed to buy bulk airline mileage. She promised returns of up to 50 percent in as little as three months.

Bonham instead used money from new investors to pay off existing contracts and never bought bulk airline mileage, authorities said. She also financed a lavish lifestyle for herself and her family, court records said. She'll be sentenced Sept. 23.

More than 1,100 investors from 42 states have filed more than $50 million in claims against Bonham's bankruptcy estate.

The U.S. Department of Justice appointed a special prosecutor to handle Bonham's case because Assistant U.S. Attorney Ken Roosa was listed among the investors.

The state ran into some of the same problems because several of its employees were involved. That included Palmer District Attorney Ken Goldman, Fairbanks Assistant District Attorney Gayle Garrigues and three paralegals.

Goldman and Garrigues allegedly wrote letters on Bonham's behalf to state banking authorities, assuring officials they never had any problems with Bonham's investment program.

Botelho said he reviewed the letters and found them ``very disturbing.''

Several other government employees submitted letters on Bonham's behalf. So, too, did former Fairbanks Police Lt. Paul Keller.

Botelho said Barker also will review investment clubs that Goldman operated on behalf of others. Goldman is licensed to operate two investment groups. The independent prosecutor will review any involvement of other Law Department employees and examine whether their investments were the result of coercion, Botelho said.

Botelho said he initially deferred any investigation at the request of federal authorities, who had similar conflict problems. Those passed when Bonham pleaded guilty in federal court.

``The trigger for us was both the indictment and conviction of RaeJean Bonham, and the IRS tax evasion indictments,'' Botelho said.

Barker also must decide if Bonham can be prosecuted on state charges that won't duplicate federal charges and raise concerns of double jeopardy.





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