ALBUQUERQUE, N.M.—A former Albuquerque real estate executive will plead guilty next week to charges stemming from allegations that he ran a multi-state Ponzi scheme that swindled hundreds of investors out of $74 million, his attorney confirmed Thursday.
Court records show a hearing has been scheduled for Wednesday in Santa Fe for a plea change in the criminal case against Doug Vaughan. He’s the only defendant and previously pleaded not guilty.
Vaughan’s attorney, Amy Sirignano, told The Associated Press in an email that her client would be pleading guilty but that she was traveling and would not be able to speak further about the case or details of the plea until Friday.
The notice for the hearing comes just a few weeks after court documents were unsealed showing Vaughan’s long-time assistant, Martha Runkle, had reached an agreement with prosecutors and planned to testify against him.
Vaughan faces a 30-count indictment on charges ranging from wire and mail fraud to money laundering related to the alleged scheme. Prosecutors have said there were more than 600 victims of the scheme.
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 records, Vaughan’s chief assistant, Martha Runkle, reached a plea agreement earlier this year to testify that Vaughan ran an investment scheme in which money put up by later investors was used to pay false profits to earlier ones.
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.
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