ALBUQUERQUE, N.M.—A bookkeeper who kept the financial records for an alleged multi-state Ponzi scheme is lined up as a key witness in the criminal prosecution of the former real estate executive accused of swindling more than 600 people out of some $74 million.
The Albuquerque Journal reported Monday that Martha Runkle has reached a plea agreement to testify that her former boss, Doug Vaughan, ran an investment scheme in which money put up by later investors was used to pay false profits to earlier ones.
Vaughan’s court-appointed lawyer, Amy Sirignano, did not respond to a request for comment on the disclosure of Runkle’s plea agreement.
While most of the investors were from New Mexico, alleged victims have been identified in Arizona, Washington, Oregon, New Jersey, Texas and Colorado, according to court documents.
Vaughan faces a 30-count criminal indictment on charges ranging from wire and mail fraud to money laundering related to the alleged scheme.
The scheme involved people loaning money to Vaughan in exchange for promissory notes that carried high interest rates and were issued through his now-defunct Vaughan Company Realtors.
The loans were supposed to be used for real estate investments that apparently were never made. When the scheme collapsed, Vaughan and his company filed petitions for bankruptcy court protection in February 2010.
Federal prosecutors allege Runkle was the last point of contact for many investors as Vaughan’s scheme collapsed. Runkle acknowledges her role as Vaughan’s chief assistant for 17 years.
According to her plea deal, Runkle said she witnessed the promissory note scheme “growing at an enormous rate.” All that time, she says she worked under Vaughan’s direction in administering it.
Despite this knowledge, Runkle said she complied with Vaughan’s instructions not to talk about the promissory note scheme.
As it was collapsing in the fall of 2009, she acknowledges making up false excuses when investors called to ask about their unpaid interest payments. She also said she called an investor in Waco, Texas, at Vaughan’s request and convinced him to invest an additional $50,000.
In an emailed statement to the Journal, Runkle’s lawyer, Michael Hinton of Houston, said Runkle crossed the line, but said she failed to grasp that what she was doing was a criminal matter.
“She was pushed and pushed by this guy – he didn’t care about her but was just trying anything to keep his scheme from collapsing,” Hinton said. “She tried to quit three times in the year leading up to the bankruptcy and he conned her into staying, then he conned her into crossing the line.”
Runkle also invested with Vaughan and has agreed to pay $49,171 to a fund to repay victims. She also agreed to pay back $50,000 to the investor she solicited for Vaughan.
Vaughan is scheduled to go to trial in May in U.S. District Court.
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Information from: Albuquerque Journal,
