Friday, Nov. 20, 2009

Hebrew Boys case going to jury

Are the 3 Hebrew Boys sinners or saints?

That's what attorneys wrapping up the federal $82 million investment fraud trial asked jurors to weigh as they begin deliberations today.

During closing arguments Thursday, defense attorneys said the trio of Midlands men worked hard to relieve debt for the downtrodden, aimed to make more money by starting new businesses and warned depositors of the possibility they could lose their money.

Attorney Michael Duncan said they were following the biblical verse from the Book of Romans that says, "Owe no man any thing, but to love one another."

Prosecutors countered that the 3 Hebrew Boys could not generate enough money to keep their promises to pay off mortgages and car and college bills - selling instead "false hopes and false dreams" of a Ponzi scheme

"Even if they helped a few people, they did so by using money taken by fraud," Assistant U.S. Attorney Mark Moore told jurors.

The men are accused of luring at least 7,000 investors from two dozen states, including many from military bases and churches, with promises to help pay off debt at a fraction of its costs. They also offered monthly lifetime residuals on investments.

Despite having no formal financial training, prosecutors say, the men told investors the money would go into foreign currency exchange markets, where they could reap big gains.

Instead, the group's leaders are accused of investing less than $100,000 and going on shopping sprees, authorities said.

Their purchases included a jet, motorcoaches, homes, condos, limousines and luxury stadium boxes, authorities said.

The 3 Hebrew Boys owed investors $1.1 billion through 2010 but had just $17 million in bank accounts when they were seized in 2007, prosecutors said.

Accused of 58 charges of federal mail fraud, check fraud and money laundering are Joseph Brunson of Hopkins, Timothy McQueen of Blythewood and Tony Pough of Columbia. If convicted, the combined counts could add up to hundreds of years in jail.

The trio has denied any wrongdoing, saying during rallies their work is faith-based and did not fall under securities laws.

Testifying for the defense Thursday, Adam Culp, pastor of a Charlotte church, said he invested $90,000 after meeting face to face with the 3 Hebrew Boys in 2006. "I wanted to know how sincere they were about helping people," he said.

Culp said he has gotten back only one check, for just $6,400. Despite losing nearly $83,000, Culp said he was not upset with the trio.

The 3 Hebrew Boys' court-appointed defense attorneys said their spending was supposed to help build more business by renting out the limos, condos, motorcoaches and the jet. A 20-acre tract they bought in Orangeburg County was going to become a hotel/convention center.

Duncan, who is representing Brunson, called the government's claim that the trio owed investors more than $1 billion "cartoon math." Depositors, as the Hebrew Boys called them, signed contracts that warned of losses. "There was no pressure, no coercion," Duncan said.

McQueen and Pough were arrested carrying small computer drives that contained records of about 14,000 investments made by about 7,000 people.

"If you are going to steal money, why would you painstakingly keep records of how much you owe?" Duncan said to jurors.

Prosecutors reminded the jurors the trio paid themselves up to $1 million each and also bought themselves nice houses and more than 20 cars, including two Mercedes-Benz sports cars valued at more than $300,000 that have not been recovered. They also showed the jury a picture of Brunson's family posing with cheerleaders inside the luxury box they bought at Bank of America stadium in Charlotte.

Some investors lost their life savings, while others were encouraged to run up credit card debt because the programs would repay their balances, prosecutors said.

"How does that help anybody get out of debt?" Moore asked jurors.

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