Two South Sound residents, William C. Lange of Gig Harbor and Joseph G. Pascua of Lake Tapps, are free on bond while awaiting trial in federal court on charges that they defrauded investors of millions of dollars in two loan and investment schemes.
They are accused in federal indictments unsealed earlier this year of three counts of conspiracy to commit securities and wire fraud.
The two men owned two businesses, Harbor Funding Group Inc. of Gig Harbor and Black Sand Mine Inc. of Lake Tapps that federal prosecutors say were used to defraud developers and investors of large sums of money.
In the case of Harbor Funding Group, the two told potential developers in the hurricane ravaged South that they could provide money to rebuild homes and developments. The price for that money was 10 percent of the loan amount upfront plus a $5,000 fee.
“With few exceptions, the defendants William C. Lange and Joseph G. Pascua failed to fund the loans they promised to make to their clients ,” the indictment claimed.
Federal prosecutors charged that the two had collected $9 million in fees since 2006.
Prosecutors say they used that money, which they told developers they had placed in escrow accounts, to pay themselves and employees, take vacations and hunting trips, make payments on Lange’s house, pay for landscaping projects and to pay Lange’s children for work they did not perform.
In the other scheme, prosecutors said, the two induced individuals to invest in a gold mining operation on an island in Alaska.
They told investors that new technology coupled with record prices for gold could yield large profits.
The two misrepresented Pascua’s business expertise and attempted to conceal their involvement in Harbor Funding, the indictment claimed.
Neither Lange nor Pascua nor their attorneys was available for comment Wednesday.
The criminal indictments, filed in New York, seek to have the two imprisoned for up to 20 years if found guilty and seek the forfeiture of real estate and several Harley Davidson motorcycles to help reimburse investors.