MINNESOTA MAN TO BE ARRAIGNED FOR $150 MILLION INVESTMENT FRAUD IN LARGEST PONZI SCHEME IN ORANGE COUNTY HISTORY

MINNESOTA MAN TO BE ARRAIGNED FOR $150 MILLION INVESTMENT FRAUD IN LARGEST PONZI SCHEME IN ORANGE COUNTY HISTORY
*Defendant is charged with stealing $21 million from over 55 victims

SANTA ANA – A Minnesota man will be arraigned tomorrow for a $150 million investment fraud Ponzi scheme, in which at least 55 Orange County victims lost over $21 million. This is the largest Ponzi scheme to be prosecuted in Orange County history and the defendant is accused of committing the crime without ever entering the State of California. Gerard Frank Cellette, 48, formerly of Anoka County, MN, is charged with 116 felony counts including 46 counts of selling unregistered securities, 43 counts of money laundering, and 27 counts of using an untrue statement in the purchase and sale of a security, with sentencing enhancements and allegations for property damage over $3.2 million, money laundering transactions in excess of $2.5 million, aggravated white collar crime over $500,000, and causing over $100,000 loss. If convicted, he faces a maximum sentence of 104 years in state prison.

Cellette is being held on $21 million bail and must prove the money is from a legal and legitimate source before posting bond. He was extradited from Minnesota to Orange County yesterday, Feb. 4, 2013, by Investigators from the Orange County District Attorney’s (OCDA) Bureau of Investigation. He is expected to be arraigned tomorrow, Wednesday, Feb. 6, 2012, at 10:00 a.m. in Department CJ-1, Central Jail, Santa Ana.  

The Ponzi Scheme

At the time of the crime, Cellette lived in Minnesota and owned Minnesota Print Services, Inc, which he operated out of a room in his home. The defendant is accused of falsely claiming to have large printing contracts with major corporations and seeking investors for fake printing projects with the promise of 10 to 15 percent returns on investments. Cellette is accused of presenting investors with fraudulent copies of contracts, known as “deal sheets,” which contained details including the name of the fictitious corporation/customer, the total contract price, and the time period within which the investment would be returned with interest (generally 60 to 90 days).

Cellette is accused of operating a massive Ponzi scheme by using funds from new investors to pay back previous investors their initial investment plus interest with the intention of misleading them into believing that the investments were legitimate and lucrative and to encourage them to continue investing with him. He is accused of committing this crime across the country in States including California, Minnesota, Georgia, Arizona, Colorado, Hawaii, and Illinois.

Crime in Orange County

In 2005, Cellette is accused of meeting an Orange County man, Steven Q., who was visiting a relative in Minnesota, and offering him an investment opportunity with Minnesota Print Services. After Steven Q. invested with Cellette, the defendant is accused of paying back the initial investment plus returns and offering Steven Q. future investment opportunities.