La. man nabbed in Ponzi scam

• By DEBRA LEMOINE
• Advocate Florida parishes bureau
• Published: Nov 20, 2009 - Page: 1A

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AMITE — State fraud investigators and sheriff’s deputies arrested a leading Hammond businessman Thursday accused of operating a Ponzi scheme that cost at least 200 investors an estimated $11 million and funded his lavish lifestyle.

Instead of investing the money on behalf of clients, William J. Chaucer Jr., 60, of Ponchatoula, used it to pay for his personal expenses, along with those of his wife, Cheryl Chaucer, investigators indicated.

The money went for such things as the Chaucers’ memberships in four New Orleans Carnival krewes as well as plastic surgery and expenses related to Cheryl Chaucer’s reign as Miss Louisiana Senior American in 2008, according to an affidavit by the Louisiana Attorney General’s Office.

“A criminal thinks they can fly under the radar because it’s not in the billions,” said David Caldwell, head of the attorney general’s public corruption and special prosecutions unit, referring to the $7 billion Stanford investment scheme. “That’s not the case.”

Chaucer was arrested at his Ponchatoula home around 9:30 a.m. Thursday, Caldwell said. Deputies and state investigators found him gathering personal items in the 5,900-square-foot home on Reyes Lane that is listed in the Greater New Orleans Multiple Listing Service for sale at $795,000.

Chaucer was booked into the Tangipahoa Parish Jail in Amite on 20 counts each of felony theft, unregistered dealer in the sale of securities, sales of unregistered securities and making material misrepresentations in the sale of a security, Caldwell said.

Arriving at the jail in a Tangipahoa Parish Sheriff’s Office patrol car, Chaucer did not say a word to news reporters as he was taken inside around 11:20 a.m. Thursday.

A hearing was scheduled for today to set Chaucer’s bond, 21st Judicial District Attorney Scott Perrilloux said.

The defendant’s wife, Cheryl Chaucer, was not arrested. Perrilloux declined to comment on whether she or anyone else would face prosecution in the case. Ponzi scheme operators fleece investors by using payments by later investors to dish out artificially high returns to initial investors, thereby drawing in a crop of new investors needed to keep the scam afloat.

Chaucer had been in business for more than 20 years, running loan and investment companies in Hammond, Ponchatoula, Covington and Slidell without complaints, Perrilloux said.

At some point, Chaucer began soliciting unsecured investments in exchange for a promised return of 10 percent or more, the affidavit says. Some investors chipped in as little as $5,000, but one has lost up to $1 million, Perrilloux said.

Investors ranged from the well-to-do to retirees who invested all their savings with Chaucer, Caldwell said. There are clients in Baton Rouge and New Orleans, but most lived in the Ponchatoula and Hammond areas, Perrilloux said.

Chaucer was able to make promised payments to investors until September, when he closed Chaucer Financial Services in Hammond, Perrilloux said. That is when most investors discovered something was wrong, Perrilloux said.