State fires D.A. linked to World Plus scheme

Posted: Thursday, November 12, 1998

FAIRBANKS - A Fairbanks prosecutor targeted in a recent probe of the state's handling of the World Plus investment scheme has been fired. And a Palmer prosecutor who became a focal point of the inquiry has submitted his resignation.

Assistant District Attorney Gayle Garrigues was terminated Monday from her position with the Fairbanks District Attorney's office. Palmer District Attorney Ken Goldman said he will leave the state Department of Law on Dec. 1.

Deputy Attorney General Cindy Cooper refused to elaborate on either departure other than to confirm that both prosecutors were leaving their $90,000-a-year positions.

``Gayle Garrigues separated from state service yesterday (Monday),'' Cooper told the Fairbanks Daily News-Miner. ``Ken Goldman tendered his resignation and it was accepted, effective Dec. 1.''

Goldman and Garrigues both invested in World Plus, a business that bought blocks of frequent-flier airline mileage and resold individual tickets.

Authorities determined the business was a front for a Ponzi scheme in which money from new investors was used to pay earlier investors. When the company collapsed three years ago, owner Raejean Bonham owed more than $50 million to investors in 42 states.

Goldman and Garrigues, who were unavailable for comment Tuesday, were among a group of law enforcement officials who provided Bonham with letters of support.

Those letters were submitted to state regulators charged with monitoring Bonham's investment program.

State Attorney General Bruce Botelho initially deferred any investigation to federal authorities.

Bonham pleaded guilty in July to mail fraud and money laundering and acknowledged she operated a Ponzi scheme. She is scheduled to be sentenced Dec. 3.

After Bonham's indictment, Botelho hired Anchorage attorney Leroy Barker to review the state's handling of World Plus along with the involvement of state employees. Barker focused his investigation on Goldman and Garrigues since both were prosecutors and faced the ``highest standards.''

Barker cleared the two and other state employees of any criminal wrongdoing.

But Barker said Goldman had used seriously flawed judgment and may have been blinded by greed due to the enormous profits he reaped. Barker criticized both prosecutors for failing to settle outstanding debts with Bonham's bankruptcy estate.

He recommended to Botelho that both be required to repay the debt to the bankruptcy estate. Barker said it was unseemly to have prosecutors fighting to keep money gained in a Ponzi scheme.

Cabot Christiansen, an attorney representing Bonham's bankruptcy estate, said he made settlement offers to Goldman and Garrigues after Barker issued his first report Sept. 30.

``We've been waiting to see if we were going to resolve it,'' Christiansen said. ``They rejected it.''

Christiansen is looking to recover close to $188,000 from Goldman on his family's investments and $99,000 from Garrigues.

Garrigues started with the Fairbanks District Attorney's office in 1984. She spent three years prosecuting cases in Kotzebue and returned to Fairbanks in 1987. She prosecuted sex crimes in the Fourth Judicial District.

Goldman joined the Fairbanks District Attorney's office in 1985. He was appointed Palmer District Attorney six years later. Goldman was named Anchorage District Attorney in 1995 but was reassigned to the Palmer office in March of 1997.

Cooper would not say whether the state had enforced Barker's recommendation to require repayment of World Plus investments. She said the state's investigation into World Plus is continuing and is being handled by the Alaska State Troopers.

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