Turnock was originally charged by Information on
In about 1996, Turnock became the majority owner of
Turnock told prospective note-holders that by charging its clients interest rates higher than the rates at which note-holders were paid, BPF generated enough funds to pay principal and interest to note-holders. However, Turnock knew BPF had not been a profitable business since at least 1998 and since 2002 its financing of small businesses had not generated sufficient revenue to make interest payments to note-holders or to repay them. For each year from 2002 through 2011 and into 2012, the amount that BPF owed to note-holders exceeded the amount of money that BPF had on hand. During that time, Turnock used most of the money invested by note-holders for purposes other than to make loans to BPF's clients. He used note-holders' money to pay BPF-related expenses, and he also diverted the note-holders' money to fund his other businesses, make loans to an entity involved in real estate transactions, pay fees to himself and pay personal expenses. He used money from new investments to pay redemptions requested by note-holders who had invested earlier and to make interest payments to earlier note-holders. Turnock also prepared false and misleading reports, which misrepresented BPF's financial position.
In early 2012, a note-holder asked to withdraw a portion of his investment. Turnock misrepresented that
This case was investigated by the
This matter is being prosecuted by the Economic Crimes Section of the
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