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Fleeced Followers? Ex-Pastor Charged with Fraud After Living High Life

7/1/09

INDIANAPOLIS (CBS/AP) Modesty is apparently not a virtue for Vaughn Reeves, a former pastor, and his sons. Private planes, sports cars and large homes were no strangers to this man of the cloth and his family, according to Indiana law enforcement officials.

The cadre was charged with securities fraud Tuesday in what officials said was a multimillion-dollar scheme aimed at church members who thought they were helping build churches but were actually providing the men luxury items and a lavish lifestyle.

The Indiana Secretary of State's office said arrest warrants were issued for Reeves, 65, and three of his sons, each charged with 10 felony counts. The four men could all face two to eight years in prison on every count if convicted. Bond for each was set at $1.5 million cash.

The men are accused of duping about 11,000 church members into buying bonds worth $120 million by urging them to fulfill their "Christian responsibility" to support church construction projects, according to a probable cause affidavit. The men said the bonds would be handled by their brokerage firm, Alanar Inc.

Prosecutors said the men pocketed about $6 million, bought two airplanes, sports cars and vacations. Reeves also bought Porsches for family members, said Jim Gavin, a spokesman for Secretary of State Todd Rokita. Most of the men's alleged victims lived in Indiana. ........

"This case goes far beyond simple theft," Secretary of State Rokita said in a statement. "The Reeveses allegedly targeted their victims through their faith, and then exploited their religious convictions in order to hide their elaborate Ponzi scheme from potential investors."

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