EUGENE, Ore. — Two brothers who ran an Oregon investment firm have pleaded guilty to charges stemming from a $40 million Ponzi scheme that hurt 400 investors.
The Register-Guard reports 74-year-old Michael Holcomb and 72-year-old Gary Holcomb pleaded guilty to conspiracy and money laundering at a hearing Friday in Eugene. Sentencing has been scheduled for February.
In exchange for the pleas, federal prosecutors dropped 35 other charges.
Also pleading guilty to money laundering were Michael Holcomb’s daughters — Jennifer Chalmers and Kristen Van Beemen.
The company, Berjac, stayed in business for decades by extending short-term loans so small businesses could cover insurance premiums. Investors made money as borrowers paid back those loans with interest.
But the business later made risky bets on real estate and things went downhill. The company started using money from recent investors to repay earlier ones — a Ponzi hallmark.
