Ponzi scheme investor fighting to keep his home

A complex, multistate Ponzi scheme that bilked 1,300 investors out of about $100 million has ensnared a former school principal and administrator from Colville.

The fallout: After several years of federal legal fights in a Dallas courtroom, George M. Carnie has filed for bankruptcy to keep his Kettle Falls home from being seized and sold to satisfy burned investors.

A receiver has won a $1.1 million judgment against Carnie for his alleged middling role in the scheme. He allegedly solicited more than $1 million from more than two dozen investors, including family members and acquaintances in Eastern Washington.

Carnie maintains he is an innocent victim of the investment fraud called the “RDI Trading Program,” which drew national attention when federal agents unraveled the activity and sent central figures to lengthy prison terms.

Ponzi schemes are fraudulent investments where a promoter uses money from new investors to pay interest and principal to existing investors. They typically collapse when there isn’t enough new investor money collected to pay earlier participants.

Carnie’s bankruptcy attorney, Kevin O’Rourke, of Spokane, said Carnie made an initial investment of $600,000 with a Colville broker who promised a return of 2 percent a month.

Carnie indeed profited, O’Rourke said, quickly doubling his money in what he thought was a real estate investment.

“He did his due diligence, understood that the company had done business in Tacoma for 25 years, and thought they were honest Christian people,” O’Rourke said.

With the federal crackdown on the company called Resource Development International out of Tacoma came an avalanche of legal problems for Carnie.

The receiver accused Carnie and many others of acting as aggregators in the Ponzi scheme, receiving money from the program by soliciting new investors or engaging in securities fraud.

The investors were told their money would be pooled and deposited with “top European banks” to conduct trades. The promised results would be annual returns ranging between 24 percent and 120 percent. And the deal came with the bogus assurance that the International Monetary Fund and the United Nations approved of the RDI program because of its dual purpose as an altruistic investment supporting humanitarian projects in other countries, according to federal court records.

The receiver alleged that Carnie and his now-deceased wife, Deanna, set up companies called Aruca Inc. and Roja Inc. to receive bank transfers and perpetrate fraud.

Carnie has appealed the federal court decision.

But the appeal did not stop the receiver collecting money for investors from trying to sell the house.