INDIANAPOLIS (AP) — An Indianapolis businessman plans to plead guilty to federal charges alleging that he operated a fraudulent investment scheme involving more than 100 people who invested more than $11 million.
Federal prosecutors said in court documents filed Wednesday that George S. Blankenbaker Jr., 54, had agreed to plead guilty to two counts of federal wire fraud and one count of money laundering, the Indianapolis Business Journal reported.
Blankenbaker, the president of Indianapolis-based Stevia Corp., allegedly conducted “a Ponzi and money laundering scheme” from August 2016 to May 2019 through three companies, prosecutors said.
A complaint filed Wednesday by the U.S. Securities and Exchange Commission said Blankenbaker and his companies raised more than $11 million from at least 109 investors, many of them elderly.
The SEC said Blankenbaker and his companies allegedly “falsely told investors that their money would be used to make short-term loans to food exporters in Asia” and that they would receive interest payments from profits the loans generated.
But the SEC said Blankenbaker misused at least $8.1 million of those investments, by directing at least $4 million to hemp production companies and using more than $1.7 million in investor funds for his personal benefit.
Investigators said Blankenbaker “also used at least $965,000 in new investor funds to make Ponzi-style payments to prior investors.”
The fraudulent scheme ended up costing 34 investors nearly $1.5 million, prosecutors said.
A message seeking comment from Blankenbaker’s attorney was left Thursday.