United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

FEDERAL JURY CONVICTS
GREGORY EARL SETSER AND HIS SISTER

Defendants Targeted Churches, Ministries, Religious Organizations
and Defrauded Investors of Millions of Dollars

Gregory Earl Setser was convicted today on all charges outlined in a federal superseding indictment, announced United States Attorney Richard B. Roper. In addition, Setser’s sister, Deborah Setser, was also convicted. Following the three-month trial and approximately two weeks of deliberations, the jury found Gregory Earl Setser and Deborah Setser guilty of conspiracy, securities fraud and money laundering charges. The Honorable Barbara M.G. Lynn, United States District Judge, remanded both defendants to the custody of the United States Marshals Service. A sentencing date was not set.

U.S. Attorney Roper said, “Setser and his four accomplices used religion as a tool to manipulate and cheat their victims, many of whom are elderly, out of money, to the tune of 58 million dollars." Roper continued, "There is simply no form of fraud more pernicious."

Gregory Setser was convicted on a total of 22 counts - one count of conspiracy to commit mail fraud and wire fraud; ten counts of wire fraud; three counts of mail fraud; one count of securities fraud; one count of conspiracy to commit money laundering; and six counts of money laundering. Deborah Setser was convicted on a total of six counts --- one count of conspiracy to commit mail fraud and wire fraud; two counts of mail fraud; one count of securities fraud; one count of conspiracy to commit money laundering; and one count of money laundering. Gregory Setser faces a maximum statutory sentence of 290 years imprisonment and millions of dollars in fines and restitution and Deborah Setser faces a maximum statutory sentence of 90 years imprisonment and fines and restitution.

The jury acquitted the remaining two defendants, Charnelle Setser and T. Thomas Henschke, on all charges. Three defendants, Gregory Setser’s wife, Cynthia Faye Setser, his son, Joshua Nathan Setser, and his brother-in-law, Larry J. Kuncl, each pled guilty prior to the beginning of trial to a securities fraud charge.

Gregory Earl Setser, age 49, recently of Canton, Texas, and now a resident of Alta Loma, California, was the President, CEO and Chairman of International Product Investment Corporation (IPIC), an import/export company, which originally operated out of Canton, Texas, and later from Ontario, California, Florida and other places. The jury found that from April 2000 through November 2003, Setser ran an elaborate Ponzi scheme that paid bogus profits to early investors using money from other investors - ultimately defrauding investors of approximately $58 million. Deborah Setser, of Rancho Cucamonga, California, was an officer of IPIC and was involved in the offer and sale of investments in programs with IPIC. Charnelle Setser, also of Rancho Cucamonga, was IPIC’s Office Manager and managed IPIC’s accounting and finances, handled payments to and from investors, and communicated with investors about current and future investment opportunities. T. Thomas Henschke, a former missionary, of Orlando, Florida, was the International Director of IPIC-Atlantic and managed IPIC’s Florida Offices and IPIC’s international operations and sold IPIC’s stock to investors.

The government presented evidence during trial that Gregory Setser, a self-proclaimed former minister, exploited his connections to highly visible members of the evangelical Christian community to meet potential investors, legitimize IPIC’s operations and sell IPIC securities. Evidence showed that the defendants targeted churches, ministries, religious organizations, and their pastors, leaders, and members to invest in programs with IPIC and its affiliated companies.

The government contended, however, that IPIC had no legitimate operations and that its fraudulent operation funded the family’s lavish lifestyle and helped maintain the company’s facade. The government presented evidence that the Setsers used their ill-gotten gains to purchase a $2.3 million yacht, a helicopter, two small airplanes and several luxury vehicles.

The government showed that Gregory Setser and Deborah Setser represented to investors that IPIC and its affiliated companies operated a highly successful import/export business in which investors could participate by entering into contracts to invest in programs IPIC and its affiliated companies offered. They falsely represented that the investment programs involved importing merchandise for resale in the United States from which IPIC would pay 50% of the profits from sales to investors. As part of their scheme, they established a website on the Internet to solicit investors. They falsely promised investors that their money was at minimal risk and that they would earn a 25% to 50% return on their investment in a three to six-month period. They falsely represented that some of their investment programs were selling merchandise to major retailers including Mikasa, Inc., Michaels Stores, Inc., Garden Ridge Corporation, Costco Wholesale, Inc., Hobby Lobby Stores, Inc., JC Penney Stores, Inc., and Pier One Imports, Inc., among others. Joshua Setser testified that his father admitted to him that IPIC’s ventures were a sham and that the representations both he and his father made to investors were false. Joshua Setser also testified that no one ever bought products from IPIC as they represented to investors.

"Internal Revenue Service-Criminal Investigation (IRS CI) worked with the Securities and Exchange Commission, the Texas State Securities Board, the Federal Bureau of Investigation, and the United States Attorney's Office to strip away the veil of legitimacy that the Setser organization, IPIC International, banked on to prey upon churches, ministries, and religious organizations," said Erick Martinez, Special Agent in Charge of the Dallas Field Office of IRS CI. Martinez continued, "What was unveiled for the jury to see: the Setser organization, IPIC International, existed for one reason only --- to commit fraud!”

The Securities Fraud Task Force includes representatives from the Securities and Exchange Commission, the Texas State Securities Board, the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Jeffrey J. Ansley, Marcus Busch and Special Assistant United States Attorney Constance L. Melton.

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