In re Raejean S. Bonham dba World Plus
Bankruptcy No. F95-00897
Unofficial Web Site

While it is not directly related to the World Plus Chapter 7 case, the recent indictments of World Plus investors Terry Franklin, Avan Brees and Donald Jennings are related to the bankruptcy. The Trustee has received several requests for copies of the indictments. This is the Brees and Jenning indictment; the Franklin indictment is also available at this site.


LORETTA C. ARGRETT
Assistant Attorney General
KEVIN M. KELCOURSE
ANASTASIA M. ENOS
Trial Attorneys
United States Department of Justice
Tax Division
P.O. Box 972
Washington, DC 20044
Telephone: (202) 514-5684
Facsimile: (202) 514-9623
Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF ALASKA

UNITED STATES OF AMERICA,

)

Plaintiff,

) Case No. A98-127 CR

) Counts 1: Conspiracy to

v.

) Defraud United States

) Counts 2-5: Filing

AVAN J. BREES and DONALD P. JENNINGS,

) False Tax Returns
)

Defendants.

)


INDICTMENT

THE GRAND JURY CHARGES THAT:

INTRODUCTION

1. At all times relevant to this indictment, the defendants AVAN BREES and DONALD JENNINGS were residents of Fairbanks, Alaska and citizens of the United States. BREES and JENNINGS are 58 years old and 55 years old, respectively, and both are retired.

2. Between 1990 and 1995, BREES and JENNINGS were involved with an entity called "World Plus, Inc." and/or "Atlantic Pacific Funding Corporation" (hereafter collectively referred to as "World Plus"). BREES and JENNINGS participated in World Plus by purchasing contracts that promised returns of up to 50% of the purchase price after six months.

3. World Plus was a company started by Raejean Bonham in approximately the mid-1980s, supposedly for the purpose of buying frequent flyer miles and reselling them at a profit. Bonham claimed that she sought participants to purchase these contracts for World Plus because she could not obtain sufficient financing through traditional lending institutions.

4. In the early 1990s, World Plus began having difficulty paying out the rates of return it had promised to many of its participants. As a result, World Plus began to use the funds from the most recent contract purchases to pay off the amounts due to previous purchasers. Eventually, World Plus became insolvent and was forced into bankruptcy in December 1995.

5. In or about 1990, defendants BREES and JENNINGS, acting together, using their own names as well as fictitious names and nominees, became participants in World Plus through a series of contracts they negotiated with Bonham. These contracts indicated the amount paid in to World Plus, the term of the contract (i.e. the length of time World Plus was to have use of the funds), and the amount defendants expected to earn at the end of the contracts.

6. At the end of the term of the contract, a purchaser had the option to (1) receive a check for the income earned and to "roll over" the amount of the original purchase price into a new contract, or to (2) "roll over" the entire amount (the income plus the original purchase price), or to (3) receive a check for the entire amount (the income plus the original purchase price).

COUNT 1:

CONSPIRACY TO DEFRAUD AN AGENCY OF THE UNITED STATES

7. The Grand Jury realleges and incorporates the factual allegations contained in paragraphs 1-6 above.

8. From on or about May 1990 through approximately mid-1995, in the District of Alaska, the defendants AVAN BREES and DONALD JENNINGS unlawfully, knowingly and willfully conspired and agreed with persons known and unknown to the Grand Jury, to defraud the United States Department of the Treasury, Internal Revenue Service, by impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service in the ascertainment, computation, assessment and collection of revenue; to wit, individual income taxes.

MANNER AND MEANS OF THE CONSPIRACY

9. It was part of the conspiracy that BREES and JENNINGS agreed with Bonham to use false names or nominees on some of the contracts BREES and JENNINGS purchased.

10. It was further part of the conspiracy that when their World Plus contracts matured, BREES and JENNINGS generally each received their income in the form of multiple checks made payable to fictitious names or nominees, a practice to which Bonham agreed.

11. It was further part of the conspiracy that BREES and JENNINGS then cashed or negotiated the checks at local bars and other establishments as part of the scheme to conceal or disguise the income from the IRS.

12. It was further part of the conspiracy that after the government began investigating World Plus, BREES and JENNINGS agreed with Bonham, in or about 1995, to attempt to void several of the contracts they had entered into with World Plus. Through backdating documents and causing them to be backdated, the defendants and Bonham tried to make it appear as though the contracts had been nullified and that BREES and JENNINGS had not received income, when in fact they had.

13. It was further part of the conspiracy that during at least 1994 and 1995, BREES and JENNINGS filed false U.S. Individual Income Tax Returns, Forms 1040, which materially understated the income they had each earned and received from World Plus in 1993 and 1994, respectively.

14. It was further part of the conspiracy that Bonham assisted defendants BREES and JENNINGS in their efforts to disguise or hide their World Plus income from the IRS by issuing false Forms 1099 to BREES and JENNINGS for the years 1993 and 1994. Such Forms 1099 understated the income BREES and JENNINGS had received through their World Plus contracts.

OVERT ACTS

15. In furtherance of the conspiracy and to effect the objects thereof, the defendants BREES and JENNINGS and others performed at least one of the following overt acts in the District of Alaska:

(A) From on or about May 1990 through 1995, BREES and JENNINGS caused checks for payments they had earned from World Plus to be made out in the names of fictitious people or in the names of nominees. As early as May 1990, checks in the name of A. D. Smith were issued to BREES and JENNINGS from World Plus.

(B) BREES and JENNINGS, together, entered into at least one contract with World Plus in approximately December 1992. Subsequently, in or about July 1993, the defendants "rolled over" the contract. However, in the "rolled over" contract with World Plus, the defendants used the fictitious name of Clinton Jamison rather than their own names in an effort to conceal their income from the IRS.

(C) Between 1990 and 1995, BREES and JENNINGS received over $200,000 worth of checks for income from their contracts with World Plus. Such checks were made payable to various fictitious names or nominees, including Phil McGroin, Madori Green, A. Goodwin, G. B. Bush, J. B. Bush, A. D. Smith, Beverly Kramme Blankenship, and Clinton Jamison. BREES and JENNINGS cashed or negotiated the vast majority of these checks at a number of local bars in Fairbanks, Alaska.

(D) In or about mid-1995, BREES and JENNINGS, and Bonham attempted to "void" at least five of the World Plus contracts which BREES had entered into, even though a number of the contracts had already matured and Bonham had already disbursed more than $40,000 to BREES. In addition, the defendants and Bonham attempted to void at least four of the contracts JENNINGS had entered into, even though Bonham had already paid JENNINGS more than $17,000 of the $22,500 he was scheduled to receive from this contract.

(E) BREES and JENNINGS agreed with Bonham to create and did cause the creation of six false documents which claimed to void six of the World Plus contracts BREES and JENNINGS had previously executed and from which they had received income.

(F) On or about April 1994, BREES and JENNINGS each filed a false U.S. Individual Income Tax Return, Form 1040, which materially understated the income each defendant had received from World Plus in the tax year 1993.

(G) On or about April 1995, BREES and JENNINGS each filed a false U.S. Individual Income Tax Return, Form 1040, which materially understated the income each defendant had received from World Plus in the tax year 1994.

All in violation of Title 18, United States Code, Section 371.

COUNT 2:

FILING FALSE TAX RETURN

16. The Grand Jury realleges and incorporates paragraphs 1-6 above.

17. On or about April 15, 1994, in the District of Alaska, defendant AVAN BREES did willfully make and subscribe a U.S. Individual Income Tax Return, Form 1040, for the calendar year 1993, which was verified by a written declaration that it was made under penalties of perjury and which was filed with the Internal Revenue Service, which said income tax return the defendant did not believe to be true and correct as to every material matter in that the said income tax return reported $25,500 of adjusted gross income, whereas defendant BREES then and there well knew that his adjusted gross income was substantially in excess of that amount, and in fact the amount reported on such income tax return omitted approximately $55,000 of income defendant BREES received from World Plus in 1993.

All in violation of Title 26, United States Code, Section 7206(1).

COUNT 3:

FILING FALSE TAX RETURN

18. The Grand Jury realleges and incorporates paragraphs 1-6 above.

19. On or about April 15, 1995, in the District of Alaska, defendant AVAN BREES did willfully make and subscribe a U.S. Individual Income Tax Return, Form 1040, for the calendar year 1994, which was verified by a written declaration that it was made under penalties of perjury and which was filed with the Internal Revenue Service, which said income tax return the defendant did not believe to be true and correct as to every material matter in that the said income tax return reported $29,872 of adjusted gross income, whereas defendant BREES then and there well knew that his adjusted gross income was substantially in excess of that amount, and in fact the amount reported on such income tax return omitted approximately $125,500 in income defendant BREES received from World Plus in 1994.

All in violation of Title 26, United States Code, Section 7206(1).

 

COUNT 4:

FILING FALSE TAX RETURN

20. The Grand Jury realleges and incorporates paragraphs 1-6 above.

21. On or about April 15, 1994, in the District of Alaska, defendant DONALD JENNINGS did willfully make and subscribe a U.S. Individual Income Tax Return, Form 1040, for the calendar year 1993, which was verified by a written declaration that it was made under penalties of perjury and which was filed with the Internal Revenue Service, which said income tax return the defendant did not believe to be true and correct as to every material matter in that the said income tax return reported $52,282 of adjusted gross income, whereas defendant JENNINGS then and there well knew that his adjusted gross income was substantially in excess of that amount, and in fact the amount reported on such income tax return omitted approximately $33,000 of income defendant JENNINGS received from World Plus in 1993.

All in violation of Title 26, United States Code, Section 7206(1).

COUNT 5:

FILING FALSE TAX RETURN

22. The Grand Jury realleges and incorporates paragraphs 1-6 above.

23. On or about April 15, 1995, in the District of Alaska, defendant DONALD JENNINGS did willfully make and subscribe a U.S. Individual Income Tax Return, Form 1040, for the calendar year 1994, which was verified by a written declaration that it was made under penalties of perjury and which was filed with the Internal Revenue Service, which said income tax return the defendant did not believe to be true and correct as to every material matter in that the said income tax return reported $65,535 of adjusted gross income, whereas defendant JENNINGS then and there well knew that his adjusted gross income was substantially in excess of that amount, and in fact the amount reported on such income tax return omitted approximately $32,500 of income defendant JENNINGS received from World Plus in 1994.

All in violation of Title 26, United States Code, Section 7206(1).

A TRUE BILL.

/S/_______________________________

Presiding Grand Juror

LORETTA C. ARGRETT
Assistant Attorney General

/S/___________________________

KEVIN M. KELCOURSE
ANASTASIA M. ENOS
Trial Attorneys
United States Department of Justice

DATE: July 22, 1998

 

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