SEC Investigates Indiana Brokerage

By KEN KUSMER

The Associated Press
Sunday, July 31, 2005; 2:06 AM

INDIANAPOLIS -- A minister-turned-financier who helped finance construction of hundreds of churches across the country allegedly bilked investors by diverting money to an account where he made loans to himself and others.

A federal judge this past week froze the assets of Vaughn Reeves of Sullivan, Ind., his brokerage, Alanar Inc., and three sons who followed him into the family business. The Securities & Exchange Commission alleged in a complaint they had committed "affinity fraud" with solicitations aimed at their investors' shared beliefs.

"They were dependent on the trust and faith of a large network of Christian investors," said John Sikora, assistant regional director of the SEC's Chicago office. He contends the Reeveses and Alanar, through a network of 26 brokers in the Southeast, Indiana, the Chicago area and elsewhere, preyed on the sympathies of investors motivated by both financial and religious interests.

Peter French, the Indianapolis attorney representing the Reeveses, said they do not deny the allegations. He said Alanar handled bond issues for nearly 700 churches across the country, and in some cases, the churches defaulted. French said the Reeveses used the funds the SEC accuses them of taking to make sure that the holders of bonds on churches that defaulted did not lose money...

Read the full article here.

-- MDT