Grand Juror Indicted After Tipping Off Ponzi Schemer

Grand Juror Indicted After Tipping Off Ponzi Schemer

 A federal grand juror is facing criminal charges after he allegedly disclosed details regarding the investigation and indictment of a suspected Ponzi schemer to a witness during a chance encounter at a local Costco - which resulted in the witness tipping off the fraudster. Terry Jones, of Des Moines, Iowa, was charged with a single count of criminal contempt in a recently-unsealed indictment. The Ponzi schemer, John F. Holtsinger, later pleaded guilty to a $1.1 million Ponzi scheme, and received a 7-year prison sentence.

According to authorities, Jones was empaneled as a grand juror in June 2011 for the Southern District of Iowa. Federal grand jury proceedings are secret in nature, and Jones was given instructions during the empanelment process from multiple officials regarding the confidentiality of the proceedings, including a U.S. District Judge, a United States Attorney, and an Assistant U.S. Attorney. After his empanelment, Jones heard testimony from a number of witnesses concerning their experiences with Holtsinger. Following the witness testimony, the grand jury returned a sealed indictment and arrest warrant against Holtsinger.

However, two days following issuance of the sealed indictment, and before Holtsinger had been arrested, a Secret Service agent received an anonymous tip that Holtsinger had been tipped off as to the existence of the indictment and arrest warrant - even though both were sealed. Additionally, Holtsinger was allegedly aware of the exact number of witnesses that had testified before the grand jury, as well as whether those witnesses had testified "for" or "against" him.

Authorities learned that a grand juror had communicated with a witness during a chance encounter at a West Des Moines Costco two days after the indictment was issued. After identifying the witness, authorities also learned that Jones was a member at the same Costco. Store records revealed that both Jones and the witness had purchased items within minutes of each other on "Costco register lane 5," and video surveillance footage maintained by Costco showed the two men engaging in a conversation. (The complaint discloses that while the Secret Service agent asked the Costco manager for a copy, the ensuing copy that was made was lost, and the footage was overwritten and permanently deleted.)  During a later interview with authorities, Jones admitted initiating a conversation with the witness at Costco after stating that he recognized the witness from the grand jury proceedings. Jones allegedly told the witness that the grand jury had felt sorry for him and the other victims, and that an indictment was issued against Holtsinger.

Unbeknownst to Jones, the witness was highly loyal to Holtsinger and immediately informed him of the substance of his conversation with Jones. Luckily for authorities, Holtsinger made no attempt to flee, and later surrendered to authorities. Jones, however, failed to appreciate the secret nature of the grand jury proceedings despite being informed by several court officials - and even admitted to authorities that this was not the first time he had provided information to individuals not associated with the grand jury.

A copy of the criminal complaint is here.

For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

For more information about LexisNexis products and solutions connect with us through our corporate site.