10/24/2008 6:00:00 AM
Former residents indicted in fraud case
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BY KIRK DOUGAL
Times Bulletin Editor
kdougal@timesbulletin.com
Two former Van Wert men have been indicted in Michigan on charges of securities fraud, wire fraud, mail fraud, and conspiracy to defraud the U.S. government. Jay V. Merkle, 53, and Eric R. Merkle, along with Charles Coppess of Lansing, Michigan, face 45-count indictments with possible prison sentences of 20 years for each of the fraud charges and another five years on the conspiracy count.
The Merkle brothers allegedly started a company called Platinum Business Industries (PBI) that was said to be involved with oil and gas exploration in Oklahoma. After recruiting Coppess to help find investors, they promised extremely high returns, up to 6% per month, for what would amount to short-term investments. They supposedly drew in victims by saying that the investments were very low risk because they were backed by equipment and other assets of the company.
The indictment charges that the equipment never existed and that none of the funds were used for oil and gas exploration. Instead, the men used most of the money in a variety of "get rich quick" schemes in and out of the country. To keep the first investors unsuspecting, they used some of the money from later victims to make the 6% monthly payments and create the appearance that PBI was delivering on its promises.
The counts allege that the men defrauded investors out of $5 million but the real figure may be as much as ten times more. The victims varied in age and economic status although some were elderly and in nursing homes. At one point, Coppess reportedly helped elderly victims convert their retirement funds and IRAs into cash so they could invest in PBI.
"It's just very embarrassing," said one Van Wert County victim who asked to remain anonymous while the trial is pending. "You work hard your whole life to be smart with your money and save and then it is taken by someone you know. People need to be warned that it can happen in Van Wert, too."
One victim went on to say that the Merkles were still contacting them in the days leading up to the indictments and asking for more money but by then the investors were cooperating with the FBI and U.S. Postal Inspection Service. Those two agencies were in charge of the investigation into PBI.
This is not the first time the Merkles have been in trouble over investment fraud. In January of 2007, they were issued a Cease and Desist order by the Office of Financial and Insurance Services (OFIS) and told to repay all their investors.
At that time their company, Jordan River Resources, Inc., was found to be in violation of Michigan securities law for using deceptive practices to sell unregistered securities in an oil and gas exploration venture. As much as $15 million was taken from unsuspecting investors.
The Merkles were being held while awaiting payments on $1 million bonds while Coppess was free on bond.
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Posted: Friday, October 24, 2008
Article comment by:
Bob Jones
How utterly pathetic this whole situation is. People in Van Wert who KNOW these Merkle men and HAVE known them for years. SHAME ON YOU. You should KNOW there is more here than meets the eye. INNOCENT UNTIL PROVEN GUILTY - WHERE DID THAT THEORY GO? Do you realize that the Merkle Men have not had the opportunity yet to be in front of a jury to explain what this is all about? Of course you don't - you just believe what you read. In time - maybe a long time unfortunately for them - you will all see what a mistake you made in condemning too soon. If these accusations were true - then why did investors get told they were getting their money back and possibly up to 6% of their investment? Where exactly is the fraud in that? HOW CAN YOU ACCUSE someone of sometehing you only know A THREAD of? I PRAY - I PRAY that no one ever accuses YOU of doing something you didn't - and that you have the financial ability to prove it - or else - your up a creek without a paddle and you'll know exactly what the Merkle men are going through. And another thing - they would never - ever be so quick as to judge YOU!
Posted: Friday, October 24, 2008
Article comment by:
Van Merkle
The whole story is not told. We investors of this oil and gas program, have gotten legal correspondence that according to recent legal proceedings in the Michigan State Courts, we will get 100% of our original investment back in the next few months and maybe an additional 6%. While not as good as promised, it is better than the current stock market. The investments by this group didn't go as planned and maybe some money was lost. If this were a total scam, how is there so much money left? I believe that most of the original investments were sound, which is why there are funds now to pay us off. A good source informed me that the payouts will be close to $40 million. I do not believe that there was an intent to commit fraud. The oil investments have obviously increased in value to offset the losses and to pay off the investors and the extensive legal, attorney and accounting fees. There are a lot of angry people saying all kinds of things but at the end of all of this, they will likely get their money back.
Feel free to use this in a letter to the editor.
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