BY JIM DOOLEY – Ponzi schemer Rachelle Griggs plead guilty today in Honolulu Federal court before U.S. Magistrate Judge Puglisi.
Rachelle’s husband, Perry Griggs and Kapua Keolanui, co-conspirators in the case, pleaded guilty earlier. A civil fraud case filed by the U.S. Commodities Futures Trading Commission against the Griggses and their company, Aloha Trading Co., Inc., is still pending in federal court.
Rachelle and Perry Griggs made national news when they became fugitives for nearly a year in 2010. Perry Griggs, with the help of his wife, began the scheme while he was a prisoner in Nevada federal prison 2005 for an earlier fraud conviction. They targeted Hawaii residents, some of whom were relatives of prisoners serving with Perry Griggs.
“This scheme began while Perry Griggs was serving a federal sentence for wire fraud and money laundering,” the CFTC said in its lawsuit.
“While incarcerated on these charges, Perry Griggs solicited investments from fellow prisoners while (Rachelle) solicited investments from families of prisoners and other membres of the general public,” the government said.
Perry and Rachelle Griggs both falsely claimed that he was an expert commodity trader and promised
“enormous returns” on the investments, according to court papers.
The government alleged that the Griggses “operated a classic Ponzi scheme,” attracting more than $3 million in investments. $1 million was used to pay “earnings” to early investors and the Griggses used another $1 million to finance a lavish lifestyle, according to the government. The couple spent money on luxury automobiles, jewelry, and a chartered private jet. The Griggses were were captured December 16, 2010 in Arizona.
U.S. District Judge David Ezra will sentence for Rachelle Griggs August 1. Perry Griggs will be sentenced by Ezra July 18.