Elderly Woman Faces Foreclosure, At Least Two Other Couples Borrowed Against Property To Invest In Alleged Ponzi Scheme

In Seattle, Washington, the Seattle Post Intelligencer reports:

• Securities fraud charges have been filed against two men accused of bilking $3.5 million from several elderly people living in the Seattle area. Filing charges Wednesday, King County prosecutors contend Stephen J. Klos, 84, was running a Ponzi scheme targeting people he met at the Mercer Island Covenant Church.
• "The defendant used his charm and influence to persuade elderly victims to invest with him but instead used the money for his personal benefit and lifestyle," King County Prosecutor Dan Satterberg said in a statement. Robert A. Justice, a 52-year-old Mercer Island man, is accused of helping Klos in the long-running fraud.
• Writing the court, Tyler Letey, staff attorney with the state Department of Financial Institutions, said Klos launched the scheme in February 2004 and ultimately defrauded 23 families of $3.5 million. Among his victims, Letey said, were a recently widowed woman and six elderly people.

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• Letey contended that Klos went so far as to take the monthly Social Security payments from an 85-year-old woman with whom he was romantically involved. The woman is now facing foreclosure while Klos maintains control of her finances. At least two other couples mortgaged or refinanced property to invest with Klos, according to charging documents.

For more, see Two charged in $3.5 million fraud targeting Seattle-area elderly.