ARCHIVES:

Posts in this section were archived prior to February 2010. For more recent posts, go to the HOME PAGE.

Archived News & OP EDs

Sunday, August 10, 2008                                                                                       View Comments

Jury finds minister guilty of defrauding 519 people out of more than $30 million in Scheme

Jury finds "Apostle" Neulan Midkiff guilty on all counts in a scam that took in as much as $390 million.

A U.S. District Court jury in Minneapolis found preacher Neulan Midkiff guilty on August 1 on all 21 counts of mail and wire fraud and tax evasion, as his family sobbed in the courtroom.

Assistant U.S. Attorney Tim Rank then asked that Midkiff be taken into custody immediately because he was a flight risk, and U.S. District Judge Michael Davis agreed. Midkiff family members then began shouting and were moved out of the courtroom by sheriff's deputies. One collapsed outside the courtroom.

"Mr. Rank, oh my God, what kind of person are you?" yelled one of Midkiff's daughters. "God have mercy on you."

Midkiff, 66, got many of his friends and neighbors involved in an Atlanta company called Horizon Enterprise, which promised high returns on an overseas banking deal but was actually a pyramid scheme that took in as much as $390 million. The scam paid investors "interest" using their own principal or money from new investors.

He also ran offshoots, Central Financial Services and Joshua Tree Group, that scammed 519 people from Minnesota and Louisiana of $30 million.

Midkiff had testified that he was duped by Horizon's founder, Travis Correll, and didn't know he was involved in anything illegal. Correll, of Atlanta, pleaded guilty to charges against him and was sentenced to 12 years in prison.

While waiting for the jury to come back, Midkiff told the Star Tribune: "I thought [the investment] was a blessing. I'm sorry people believed in me because I believed in it. Nothing has ever happened in my family like this."

The jury deliberated about four hours before finding the Louisiana native guilty of eight counts of mail fraud, eight counts of wire fraud, one count of conspiracy and four counts of failure to file tax returns.

Midkiff faces a potential maximum penalty of 20 years in prison on each fraud count, five years on the conspiracy count and one year on each tax count. Sentencing has been scheduled for Oct. 1.

Midkiff sat passively while each count was read. Members of his family held hands and began sobbing as the decision was read.

As deputies began to handcuff Midkiff, family members began shouting and several plainclothes deputies scattered across the courtroom quickly rose to remove the family. The attorneys exited on a freight elevator.

"This is not justice," yelled his wife, Donna.

Midkiff founded Shiloh Church in Forest Lake after moving to Minnesota in 1994. He named himself "apostle" of the church and named his wife "prophetess."

According to court testimony, Donna also had access to some of the accounts. Other members of Midkiff's family, including brothers and sons, also recruited investors to the scheme and were paid for their efforts. Donna and son David are named in a lawsuit by some of the investors.

Lost everything

When the scheme collapsed, the victims were farmers and factory workers, janitors and retirees. They put their faith and money in the hands of Midkiff and his partner, Jerry Watkins, who has pleaded guilty to fraud and testified against Midkiff.

Victims say the pyramid scheme took their savings, pensions, mortgages and even a family farm.

One, Norman Tetrault, gave Midkiff $45,000 near the end of the scam.

"Well, he got what he deserved," Tetrault said after learning of the verdict. "[He was] like Satan, playing tricks on people. But is he going to give all the money back? Someone has it."

Midkiff, a former barber, roofer and construction worker who lived in a mobile home when he moved to Minnesota, bought a $1.3 million lake home, luxury cars and a motor home, and paid himself about $3 million. The SEC has frozen his assets. Before being taken into custody, Midkiff was living in an apartment and on Social Security, his lawyer said.

In closing arguments, Tracy Perzel, assistant U.S. attorney, said Midkiff's claim that he didn't know he was perpetrating a crime was "willful blindness" designed to distance himself from the illegal activity.

"Religion for some people was very important [in the scam]," she said. "It helped them overcome the idea that this was too good to be true."

Dave Willis, one of dozens of victims in Louisiana, said "there are going to be a lot of very happy people down here. When you are talking 30, 40 thousand dollars to a country boy, that's a lot of money.

"When you do that in God's name, well, God is going to get you," he said.

This case is the result of an investigation by the U.S. Postal Inspection Service, the Internal Revenue Service - Criminal Investigation Division and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and Tim Rank.


STORY LINK
| FBI PRESS RELEASE