The U.S. Attorney’s Office for Nevada on Wednesday charged six people, including a Gig Harbor woman, in a scheme that allegedly bilked would-be investors out of $3 million over 10 years.
Constance C. Fenton, 68, is charged with one count of conspiracy to commit mail fraud and wire fraud, six counts of wire fraud, one count of securities fraud, one count of conspiracy to commit money laundering, two counts of engaging in money transactions in criminally derived property and nine counts of money laundering.
Also indicted was Clark County, Nev., District Court Judge Steven E. Jones, who allegedly used his office to lend credibility to the scheme, according to the U.S. Attorney’s Office in Las Vegas. The rest of the defendants live in Nevada or Oregon.
Federal prosecutors allege that the ring, from 2002 until October 2012, “induced individuals to loan them money under the guise that they would be repaid quickly and would earn high rates of interest,” according to a statement.
The pitch: One of the co-conspirators worked for the federal government and had access to public officials and “secret government programs,” federal prosecutors said.
The defendants also told their marks the group “had property rights in Arizona and Nevada, including water rights in northern Arizona, land rights on the Las Vegas strip and access to World War I bonds, but that short-term loans or cash investments were needed to secure the rights,” federal prosecutors said.
The defendants are accused of soliciting victims by telephone, by mail and over the Internet. They never returned the money, prosecutors said, using it instead to enrich themselves or pay off gambling debts.
Prosecutors said Jones vouched for the scheme when investors became disgruntled and used his office to delay legal proceedings against one of the co-conspirators. The judge “received cash proceeds from the scheme at the courthouse where he presided over cases,” according to the prosecutors’ statement.
They said Jones and another conspirator laundered more than $250,000 through a bank account they controlled.
A lawyer for the judge told the Las Vegas Review-Journal that Jones maintains his innocence.
It was not clear Wednesday what specific role Fenton allegedly played in the scheme.
She has been arrested and made an initial appearance in U.S. District Court in Tacoma, said Natalie Collins, a spokeswoman for the U.S. Attorney’s Office in Las Vegas. She was released pending arraignment in Las Vegas, which should happen in the coming weeks, Collins said.