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Secretary of State

SOS > Media Center >  Press Releases > Secretary of State’s Prosecution Assistance Unit Closes Alanar Case with Convictions and Prison Sentences for All Defendants in Investment Fraud Scheme Secretary of State’s Prosecution Assistance Unit Closes Alanar Case with Convictions and Prison Sentences for All Defendants in Investment Fraud Scheme

Successful partnership between Secretary White’s office and Sullivan County prosecutor comes to a close as final defendant in Alanar case is sentenced.

INDIANAPOLIS (July 29, 2011) Indiana Secretary of State Charlie White is applauding another success of his Securities Division’s Prosecution Assistance Unit and local authorities. Vaughn “Chip” Reeves Jr., the eldest of three brothers involved in a scheme encompassing their Alanar enterprise and related ventures, pled guilty today to ten counts of aiding and abetting securities fraud. The plea provides for a 24 year sentence, with four years suspended for probation, and with the final four years to be served on in-home detention.

Investors in Alanar church bonds and churches were misled in the sale of the bonds. The ten counts of fraud related to ten different church bonds that left over 3,000 people, mostly church members and churches, with losses in excess of fifteen million dollars.

Alanar, the holding company owned by Vaughn Reeves and his sons Josh, Chris, and Chip (Vaughn, Jr.) sold bonds to finance church construction and then shuffled money to cover losses without telling investors or the churches in what has been termed a modified Ponzi scheme. The investigation and subsequent criminal charges against father and sons was a collaborative state effort with the Sullivan County Prosecutor Robert Hunley, the Indiana State Police, and the Secretary of State’s Prosecution Assistance Unit. This effort followed a federal receivership of Alanar that began in 2005.

This plea follows an October 2010 trial where a Gibson County jury found the patriarch of the family, Vaughn Reeves, an ordained minister and founder of Alanar, guilty of nine counts of fraud, resulting in a prison sentence of 54 years. In February and May 2011, younger brothers Josh and Chris also pled guilty to all ten counts of fraud and received a six and eight year prison sentences respectively with probation.

“Hoosiers should be on the lookout for this type of ‘affinity fraud,’” White said after the sentencing of Chris Reeves in May. “When promoters of unlawful investments prey on people of the same faith, our office will be here to help bring them to justice.”

This brings to a close a successful partnership between White’s Securities Division and the Sullivan County Prosecutor’s office.

Information for Alanar Investors:

http://www.in.gov/sos/securities/2875.htm


About the Prosecution Assistance Unit

The Prosecution Assistance Unit was created within the Enforcement Section of the Securities Division to assist law enforcement agencies in prosecuting white collar criminals. Currently the unit includes two attorneys and two investigators devoted exclusively to the enforcement of the criminal provisions of the Indiana Securities Act, the Indiana Loan Broker Act and related statutes. The Unit operates under the direction and supervision of the Securities Commissioner and the Senior Investigator.

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Media Contact:
AJ Feeney-Ruiz
Deputy Chief of Staff
Communications Director
Office of Indiana Secretary of State Charles White
Office: 317-233-8655
Cell: 317-730-4778