Settlement reached to repay investors

A Spokane County man accused of running a Ponzi scheme has agreed to repay about 200 investors and has been banned from selling investments or securities.

Craig T. Jolly entered into the legal settlement with the U.S. Securities and Exchange Commission after charges were filed 11 months ago.

The SEC alleged that Jolly raised money by selling notes tied to his business, Quest Holdings Inc. He ran an Internet site called EarnByLoaning out of his home in Airway Heights.

Court filings by the SEC say Jolly solicited $4 million from 200 investors. He pocketed $628,000 to buy vehicles, pay medical bills and finance his own money-losing stock trades on E-Trade.

Jolly used the Internet to lure investors, telling them he was successful in the financial markets and could earn them 19.5 percent interest. Instead he used money from new investors to make payments to earlier investors.

The SEC alleged that Jolly shut down his Web site when he learned of its investigation and diverted at least $100,000 to Panama and then to Belize with the stated intent to buy undeveloped real estate.

Though the SEC was able to freeze some financial accounts, attorney Robert Mitchell said details are still being worked out to ascertain how much money Jolly has to repay investors from 37 states and 21 countries.

At least some money could be returned this winter or spring.

Jolly represented himself in the federal court case. He does not have a listed telephone number and could not be reached for comment.