A Michigan man learned that he will not serve any jail time in connection with allegations he used his family dining restaurant to launder money in connection with a $9 million Ponzi scheme. Douglas Edward Kacos, 58, instead received a sentence of three years of probation and fifty hours of community service. Kacos could have received up to two years in prison after earlier pleading no contest to fourth-degree money laundering charges. The masterminds of the scheme, Jeffrey Ripley and Danny Lee VanLiere, previously received sentences of six-to-twenty years in prison.
Beginning in July 2006 and continuing up until January 2012, Ripley and VanLiere solicited investors for their company, API Worldwide Holdings (“API”). The pair solicited mainly elderly investors, convincing them to cash in certificates of deposit (“CDs”) and other investments they owned, and once those investments matured, pressuring them to invest the proceeds in API. The pair raised more than $9,000,000 from investors, and were later arrested in March 2012 and charged with operating a Ponzi scheme.
Kacos and another man, Thomas Doctor, began assisting Ripley with collecting funds from investors, despite authorities’ allegations that the men were aware of Ripley’s previous run-ins with regulators over the sale of unregistered securities. Kacos, who operated the New Beginnings Restaurant in Grand Rapids, Michigan, began acting as a registered agent for API and opening financial accounts to receive funds from API investors. Once these funds were received, Kacos then wired those funds to foreign destinations, including Africa and the United Kingdom, to allow Ripley to avoid detection by regulatory or law enforcement.
Kacos and Doctor were arrested in October 2013, and maintained they were unaware of the criminal nature of their actions.