LOUISVILLE, Ky. (AP) — A former race car driver whose father went to prison for swindling investors has been indicted on charges that he ran a $15 million Ponzi scheme.
Brian C. Rose is accused of running a scam that ripped off 164 investors in four states who thought they were investing in coal mines.
Rose, 34, was arrested June 17 in Tennessee and indicted with eight co-defendants on charges of fraud and money laundering, The Courier-Journal reported (http://cjky.it/1qm8znY). Prosecutors say he used the money to buy racehorses, cars and took gambling trips to Las Vegas.
He has pleaded not guilty to the charges.
Prosecutors say he started the scheme in Louisville and southern Indiana in 2011 under the name Earth Energy Exploration. He moved to Johnson City, Tenn., and renamed his operation New Century Coal after investigators in Kentucky and Indiana began looking into the scheme. His father, David G. Rose, left prison last year after serving about four years for swindling investors out of millions of dollars.
The indictment said the younger Rose operated under the name John Hankins, and accepted money from unsuspecting investors that was similar to the methods used by his father, who pleaded guilty in 2009 to tax evasion and fraud.
The charges say Rose's company, New Century Coal, identified potential high-income investors, in part from lists of victims of prior fraudulent financial schemes. One investor, identified only as "JP," wired $2 million to the company, and another, "JG," gave over $202,000.
Federal prosecutors are seeking a $15 million judgment against Rose and his co-defendants, who include Jennifer L. Key, 36, of Louisville, who is portrayed in the indictment as Rose's money manager and accused with him of using $625,000 of the funds to buy and maintain racehorses.
Rose is being held without bail after a federal magistrate judge determined he was a flight risk because the government has yet to account for $10 million of the money invested in the alleged conspiracy.
The defendants have all pleaded not guilty. The others are Robert S. McGregor, a.k.a. Jim Robinson III, 36, of Bowling Green, Ky.; Dallas P. McRae, 44, of Orlando, Fla.; Hugh F. Sackett, 83, of Anderson, S.C.; James M. Robinson, 55, of Pekin, Ind.; Brent Loveall, 30, of Johnson City, Tenn.; and Ray C. Spears, a.k.a. Brock Hamilton, 44, of Johnson City, Tenn.
Rose, who began his NASCAR career in 2001 in its Craftsman Truck Series, was indefinitely suspended in 2003 for failing to take a drug test following an arrest in Kentucky.
Information from: The Courier-Journal, http://www.courier-journal.com