Former head of La'ie center sentenced in Ponzi scam

Associated Press

SEATTLE — A former head of the Polynesian Cultural Center in Hawai'i has been sentenced to four years in prison for his role in an investment scheme that officials said defrauded more than 3,200 people of about $74 million.

William H. Cravens also was sentenced yesterday to three years of supervised release and ordered to pay restitution, said Lawrence Lincoln, spokesman for the U.S. attorney's office in Seattle. The amount of restitution will be determined later.

Cravens, of La Jolla, Calif., pleaded guilty in June to one count of wire fraud and one count of conspiracy to commit wire or mail fraud. He was one of six people who either entered guilty pleas or were convicted at trial on charges of fraud and conspiracy in the same scheme, which prosecutors said victimized people in the United States and Canada.

Prosecutors said the scheme promised returns as high as 120 percent to tax protesters, libertarians and members of the "Patriot" movement if they joined three investing clubs — Vista International, Oakleaf International and Rosewood International.

The defendants, who had promised to investors that their principal was safe, actually were operating a Ponzi scheme in which early investors were paid with later investors' money, prosecutors said.

Prosecutors said Cravens set up a shell corporation in American Samoa and then opened a bank account at ANZ Bank in neighboring Samoa, leading investors to believe that it was a real bank they could send money to, prosecutors said.

The government has recovered more than $20 million of victims' money, much of it from bank accounts in Samoa.

Cravens headed the Polynesian Cultural Center in La'ie from 1975 to 1983 but has not lived in Hawai'i since the early 1990s.

The California-born Cravens also once served as chairman of the Development Bank of American Samoa.