By Lisa Trigg
SULLIVAN — A former Sullivan pastor and his three sons have pleaded not guilty to charges they bilked millions from investors in an elaborate Ponzi scheme built on money intended for church construction projects.
Special Judge Jim Osborne of Knox County Superior Court presided over Wednesday’s hearing in Sullivan Circuit Court to appoint defense attorneys for Vaughn Reeves Sr., 65, and sons Chris Reeves, 40, and Josh Reeves, 33. All three men told Judge Osborne they own no property and have no funds to hire their own counsel.
However, Chip Reeves, 44, told the judge he will be represented by attorneys Nick Thiros, Merrillville, and James Voyles, Indianapolis.
Separate trial dates for the men were set for November and December, with all four pretrial conferences on Oct. 16 in Sullivan Circuit Court.
An audience of more than 40 people, many affected by the alleged investment scheme, watched the court proceedings, a few murmuring satisfaction when they saw the former Alanar Inc. executives arrive handcuffed and wearing jail-issued orange inmate clothes.
The men entered the courtroom quietly and sat together to await their turn in front of the judge and Sullivan County Prosecutor Robert Hunley, who read each of the 10 counts of class-C felony securities fraud to Vaughn, Chris and Josh Reeves. At the request of his attorney, the reading of the 10 criminal charges and penalties facing Chip Reeves was waived.
Bob and Teresa Moore of Terre Haute told the Tribune-Star they invested $300,000 with Alanar in early 2004 and felt it was a good investment due to the company’s reputation and longevity.
“They didn’t seem fly-by-night,” Teresa Moore said.
The $300,000 included all of Teresa’s retirement savings from working more than 30 years at Columbia House, in addition to the couple’s personal savings.
Bob Moore called the money “everything we had” and he had no good words for the Reeveses.
Some investors have been paid a small percentage on their investments as Alanar goes through the receivership process to sort out its finances. As a result of the receivership, in February the Moores did get a check for about 10 percent of their investment.
According to court documents, the Reeveses allegedly duped investors into buying bonds that raised at least $120 million. The stated purpose for the vast majority of the bonds was to finance church construction and expansion. However, the Reeveses allegedly shuffled this money among various accounts and stole approximately $6 million for themselves in the process, investigators say.
Prosecutor Hunley and Indiana Secretary of State Todd Rokita announced filing of the criminal charges June 30, alleging securities fraud that occurred between September 2000 and July 2005. All four men turned themselves in to authorities by July 1 and are being held in the Sullivan County Jail on $1.5 million cash bond each.
Judge Osborne set a jury trial date of 9 a.m. Nov. 16 for Vaughn Reeves Sr. Attorney Brian Jewell of Knox County was also appointed as his public defender.
A jury trial date of 9 a.m. Nov. 30 was set for Chip Reeves.
A jury trial date of 9 a.m. Dec. 7 was set for Chris Reeves. Attorney Jeff Johnson was appointed as his public defender.
A jury trial date of 9 a.m. Dec. 14 was set for Josh Reeves. Attorney Chris Ramsey was appointed as his public defender.
Following the hearing, Prosecutor Hunley said it appears the judge decided to start the trials with Vaughn Sr., who was head of Alanar.
The building of the case against the men involved many months and the review of thousands of documents. Many members of the audience exiting the courtroom Wednesday thanked Hunley for prosecuting the Reeveses.
“We’re dedicated to see this through,” Hunley said.
