United States Attorney
Northern District of Texas

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

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

JUDGE SENTENCES FAMILY MEMBERS WHO
DEFRAUDED CHURCHES, MINISTRIES AND RELIGIOUS ORGANIZATIONS
OF APPROXIMATELY $62 MILLION

Gregory Setser Sentenced to 40 Years in Prison, Without Parole

DALLAS - Gregory Earl Setser, who was convicted in June 2006 of 22 counts of conspiracy, securities fraud and money laundering, was sentenced today, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. U.S. District Judge Barbara M.G. Lynn sentenced Setser, 50, to 40 years in prison, and ordered him to pay approximately $62 million in restitution, jointly and severally with his co-defendant family members. Setser has been in custody since his conviction last year.

U.S. Attorney Roper said, “I applaud Judge Lynn’s tough sentences today --- it should send a clear message that those who use religion as a tool to defraud, will be severely punished. There is simply no form of fraud more pernicious.”

Gregory Earl Setser, a recent resident of Canton, Texas, who most recently resided in Alta Loma, California, was the President, CEO and Chairman of International Product (IPIC), an import/export company which operated out of Canton, Texas, and later from Ontario, California, Florida, and other places. At trial, the jury found that 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, ultimately defrauding investors of approximately $62 million in his elaborate Ponzi scheme.

Gregory Setser’s sister, Deborah Setser, of Rancho Cucamonga, California, who was convicted along with Setser at trial in June, was sentenced today to 15 years in prison. Deborah Setser was an officer of IPIC and was involved in the offer and sale of investments in programs with IPIC and Home Recovery Network (HRN), a companion fraudulent scheme run by the defendants. Deborah Setser has been in custody since her conviction.

Cynthia Faye Setser, Gregory Setser’s wife, did not appear for her original sentencing date and remains a fugitive. She pled guilty prior to trial to one count of securities fraud. Her photo is attached to this press release (.jpg file). Anyone with information regarding her whereabouts is requested to contact the Federal Bureau of Investigation at 972-559-5000.

Setser’s son, Joshua Nathan Setser, also pled guilty to securities fraud and was sentenced earlier this month to two years in prison and six months of home confinement.

At trial, 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.

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

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 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.

U.S. Attorney Roper praised the investigative efforts of The Securities Fraud Task Force, which 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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