Authorities say something is brewing in Seattle-and it isn't coffee.
Frederick Darren Berg is being tied to an alleged financial fraud that
is being called the biggest
Ponzi scheme ever prosecuted in the state of Washington.
In a statement highly reminiscent of the usual Ponzi patterns, alleged
victim Ron Neubauer said, "My oldest friend was getting checks every
month - 10 percent, I think, and for years." Neubauer first invested
his money in Berg's Meridian Group in 2006, and is a former federal
Berg, 48, is the CEO and founder of Meridian Group, a mortgage-based business.
He stands accused of defrauding investors of more than $100 million between
the years of 2003 and 2010 through the Seattle-based company.
Prosecutors contest that Berg spent millions of dollars intended for client
investments on personal use and a lavish standard of living, including
a ritzy Mercer Island mansion valued somewhere in the range of $10 million
and two personal jets.
Investors and authorities are left asking how the scheme could have possibly
hoodwinked so many, so thoroughly, and for so very long.
In interviews before his arrest last year, Berg stated, "It's
really hard to identify where it crossed that line. We certainly didn't
intend for that to happen."
Thus far, Berg has pleaded not guilty to the charges.