The First Circuit Court of Appeals upheld the conviction of the wife in a husband-and-wife team of pyramid-schemers in Massachusetts. The couple swindled approximately 500 people out of $20,000,000. A third member of the scheme pleaded guilty on the first day of trial.
James Bunchan founded two companies. His ventures were classic pyramid schemes, recruiting investors and offering them incentives to recruit additional investors. Bunchan has since been convicted.
Seng Tan, Bunchan’s wife, was the CEO and Executive National Marketing Director of the organizations. She ran informational seminars targeting Cambodian refugees who spoke limited English, soliciting investments and promising monthly returns in perpetuity; the higher the initial investment, the higher the return, she promised.
Tan made several of these promises in writing.
Money poured in and old investors were paid with money from new investments, keeping them happy. But the investors’ money was not re-invested for their benefit. Instead, the money went straight into the pockets of Bunchan and Tan.
The scam didn’t hold up long and when investors stopped receiving their money, they complained. The couple and company President Christian Rochon were arrested, indicted and convicted of mail-fraud, money-laundering and conspiracy.
On appeal, Tan’s arguments were weak.
She challenged the sufficiency of evidence, claiming that no sensible jury could have convicted based on the evidence presented. She denied any knowledge that she was participating in a pyramid scheme. Unfortunately for Tan, witness after witness came forward corroborating her knowledge of the scheme, her promises and her exuberant pitches. And with documents evidencing the same, the evidence of her knowledge was obvious.
She also asserted that the mail-fraud charges were unfounded, as she didn’t use the mail system for the purpose of furthering the scheme. Unfortunately for Tan, evidence of the letters sent to investors once again countered that assertion.
In a last ditch effort, she claimed that there was a variance in the indictment and proof. The court noted that a variance arises in the case where an allegation in the indictment differs materially from what was proved at the trial. The variance must have prejudiced that defendant in order for the charges to be reversed. The court disagreed with Tan’s argument.
Tan’s conviction was affirmed.