Woman behind Ponzi scheme gets three more years

Posted: Thursday, October 24, 2002

ANCHORAGE (AP) -- A Fairbanks woman who was to be released soon from federal prison was sentenced Wednesday to three more years for running Alaska's largest-ever Ponzi scheme.

RaeJean Bonham, 52, earlier this year pleaded no contest to state charges of filing misleading securities statements in connection with the World Plus scam that bilked investors out of about $15 million.

In exchange for the plea, prosecutors dropped a perjury charge that carried a maximum 10-year sentence.

Bonham already is serving a five-year sentence after pleading guilty to federal charges of mail fraud and money laundering in 1998. She participated in Wednesday's sentencing by phone from Geiger Corrections Center in Spokane, Wash.

''This is the type of case that shocks the conscience,'' Superior Court Judge Larry Card told Bonham. He also placed her on 10 years probation.

Prior to sentencing, Bonham told the judge she was sorry for what she had done and intended to pay restitution ordered by the federal court while at the same time trying to become a better person. She has been ordered to repay $5.7 million.

''I want you to know first of all how sorry I am for the pain and suffering I've caused,'' she said. ''I will always carry the guilt and shame for the rest of my life.''

About 1,200 World Plus investors, many of them in the Fairbanks area, were told their money would go toward buying blocks of corporate frequent-flier airline miles that would be repackaged into tickets and sold at huge profits.

But what Bonham actually was operating was an illegal pyramid scheme in which early investors were paid with money put in by later investors. The scam collapsed in December 1995.

Brian Clark, assistant attorney general for special prosecutions, said the enormity of Bonham's crime was unprecedented in Alaska. He said the dollar amounts involved were 15 to 30 times higher than the next worse case.

''People's lives have been destroyed,'' Clark told the judge.

Card also heard from several victims.

Jim Chubley of Fairbanks encouraged the judge to show Bonham no leniency. He said he lost about $2,000.

''She did target a lot of elderly people that poured their retirement into this scheme,'' he said. ''She showed no mercy or compassion for people whether they could afford it or not.''

Nancy Larson of Fairbanks said her daughter's college money is gone. She and her husband are worried about how to pay for their son's college education in a couple of years. And her husband's plan to retire in six years is off.

''That woman should sit and reflect upon her actions,'' Larson said.

Bankruptcy trustee Larry Compton said nearly all the money has been accounted for. Two years ago former investors and creditors received about $6.2 million. Next month they are expected to receive another $5.6 million.

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