Federal prosecutors say a Napa couple ran a $130 million Ponzi scheme selling fake certificates of deposit to more than 1,200 people. An indictment issued Wednesday accused William Wise, 62, and Jacquline Hoegel, 55, of operating the scheme to sell the CDs for years costing investors more than $75 million in losses.
Wise and Hoegel allegedly controlled the three banking entities but they portrayed one of them as based in Switzerland as a private financial services company.
The CDs promised buyers guaranteed rates of return as high as 16 percent in some cases, according to U.S. Attorney Melinda Haag.
The government says that despite the promises of high returns based on allegedly overseas investments, the money was instead used personally by Wise and Hoegel and to make interest payments to earlier CD buyers.
Only Hoegel has been arrested. Wise, a citizen of Canada, is believed to be in Canada and a warrant for his arrest has been issued, Haag said.
The 23-count indictment accuses them of money laundering, conspiracy and fraud.
The CDs were issued by Millennium Bank, licensed in St. Vincent and the Grenadines, United Trust of Switzerland, and Sterling Bank and Trust, but all three were controlled by Wise, with Hoegel his second-in-command, according to the government.
The prosecution was the result of a lengthy IRS and FBI criminal investigation.
Wise was living in Raleigh, N.C. and Hoegel in American Canyon, Calif.
They operated the purported Ponzi in a Napa office where funds were purchased and administered.
Hoegel made her initial court appearance before U.S. Magistrate Judge Carolyn Delaney in Sacramento and released on bond. Her next court date for arraignment is March 6 before U.S. Magistrate Judge Elizabeth LaPorte in San Francisco.
The case has been assigned to U.S. District Judge Edward Chen.
Case: U.S. v. Wise, CR12-0111EMC