The FBI arrested eight men Monday for allegedly using religion to swindle investors out of more than $50 million, and spending the money to charter private jets and rent luxury cars and apartments.
FBI officials say John Franklin Harrell, 69, and his associates ran a cult-like criminal enterprise based in San Diego that defrauded dozens of victims from around the nation.
The arrests came after a yearlong investigation of the group, which officials believe had about 30 members and operated for the last eight years.
Harrell and seven others were charged with fraud, conspiracy and money laundering. Search warrants were executed in San Diego, Dallas and Las Vegas.
The victims, who worked in farming, construction and trucking, were promised a 100% return on their investment. They were from throughout the country, FBI officials said. Authorities said most of the money will not be returned because of the suspects’ lavish lifestyles.
Harrell claimed to be in charge of a $1.6-trillion trust created by a descendant of Joseph Smith, the founder of the Mormon Church, the FBI said.
He allegedly told investors that he was raising money to start the “Good Samaritan” insurance company, and promised to access the trust to repay them, authorities said.
The Santee man would start a business meeting with a prayer circle, when potential investors held hands, prayed and hugged one another, authorities said.
Many of the meetings took place in an upscale apartment complex in the Mission Valley area of San Diego.
“He would infuse religion with the investors and his associates,” said FBI spokeswoman Jan Caldwell. “They would have prayer meetings all the time. It was kind of cult-like.”
Harrell also ran his enterprise through intimidation, threatening to kill suspected government agents, authorities said. He warned that traitors would be punished by a “shadow government,” Caldwell said. “It went from prayer meetings to threatening the loss of life without stopping at go,” she said.
Last year, Harrell allegedly spent $300,000 on rental cars. Authorities believe he also spent investors’ money to pay the members daily cash stipends and to charter private jets at $31,000 per trip from San Diego to Dallas. Potential investors were lured to the group by word of mouth.
The FBI began investigating the alleged scheme after a few banks reported suspicious activity: large amounts of money were being deposited one day and withdrawn the next.
In addition to Harrell, also arrested were J. Paul Anderson, Juan Gregorio Fuentes, Kenneth Eugene Hodgell, Kenneth Lorenzo Kempton, William Job Leavitt, Jack Reitz and Morris Sankary, all of San Diego County.
Authorities are continuing to look for additional victims. “This may be just the tip of the iceberg,” Caldwell said.