RIVERSIDE, CA – 8 June – LAWFUEL – The Law News Network – An Inland Empire man who ran a bogus “high-yield investment program” that was nothing more than a Ponzi scheme that allowed him to collect more than $26 million from victims around the world has been sentenced to 168 months in federal prison.
John C. Jeffers, 64, of Mentone, was sentenced late yesterday afternoon by United States District Judge Robert J. Timlin. In addition to the prison term, Judge Timlin ordered Jeffers to pay $26,245,712 in restitution to more than 80 victims.
Jeffers, the owner of J.C. Jeffers & Company, a Redlands-based operation that was at the center of the Ponzi scheme, pleaded guilty last July to three counts of money laundering.
A second defendant in the case, John Minderhout, 57, of Yucaipa, pleaded guilty before Judge Timlin last July to three counts of wire fraud. Minderhout was sentenced in November to 57 months in prison and was ordered to pay $2,313,500 in restitution.
Jeffers and Minderhout defrauded investors out of more than $26 million in what they said was a high-yield investment program they called the “Short Term Financing Transaction.” The funds were collected from investors around the world from 1996 through 2000. Some investors were told that proceeds would be used to finance humanitarian projects around the globe, such as low-cost housing for the poor in developing nations. Jeffers sent letters to some victims that falsely claimed the program had been licensed by the Federal Reserve and the program had a relationship with the International Monetary Fund and the United States Treasury. While Jeffers and Minderhout promised investors profits of up to 4,000 percent, most of the money collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scam alive and to pay his own personal expenses.
Jeffers has been in jail since July 7, 2004, when Judge Timlin found that he violated the terms of his release on bond. Judge Timlin determined that Jeffers obstructed justice and tampered with a witness from whom Jeffers received money after he was indicted. In sentencing papers filed in relation to yesterday’s hearing, the government argued that Jeffers continued to work on this scheme even after being jailed last summer.
The claims made by Jeffers and Minderhout were similar to those made by perpetrators of “prime bank” or “roll” programs that were popular scams in the 1990s. The FBI, the Federal Reserve, the International Monetary Fund, the Office of the Comptroller of the Currency and the Treasury Department have all issued advisories and warnings to the public about these “high-yield investment” scams.
This case is the product of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation Division.