UPDATE - He was convicted! Two articles follow:
http://www.heraldtribune.com/apps/pbcs.dll/article?Date=20021101&Category=APN&ArtNo=211010953&Ref=AR
Miami-Dade company founder guilty of fraud
The Associated Press
A financial company founder charged with bilking mostly elderly members of his church by offering "safe" investments while running an old-style fraud has been convicted on all counts.
A federal jury found Raymond L. Knowles guilty Thursday on 16 counts of mail fraud, four counts of wire fraud and four counts of securities fraud, Miami U.S. Attorney Marcos Daniel Jimenez reported Friday.
Knowles, formerly of Opa-locka and Pembroke Pines, was arrested April 2 in San Antonio, Texas, then released on $500,000 bail before his Miami trial.
He will remain free at least until a ruling expected later this month by U.S. District Court Judge Donald L. Graham, who presided over the trial, on a defense motion for bond pending sentencing.
Knowles' Miami-Dade County-based company, All Diversified Financial Services Inc., targeted mostly elderly members of his Jehovah's Witness church and people Knowles met through them.
His company promised clients monthly returns of 8.5 percent to 9.25 percent when market rates were lower and the business was losing money.
The charges covered promissory notes issued by All Diversified from 1997 to 2000. The company was dissolved as a corporation by Florida regulators in October 1998.
Through All Diversified, Knowles actually ran a Ponzi scheme, in which old investors are paid using money from new investors. Knowles used some of the money to pay for leases on vehicles for himself and his wife, and to pay his business, personal and other expenses.
Knowles could be sentenced to up to five years in prison for each mail and wire fraud count and up to 10 years for each count of securities fraud.
A sentencing hearing was set for Jan. 9 before Graham.
http://www.sun-sentinel.com/news/local/miami/sfl-111ponzischeme,0,3520863.story?coll=sfla-news-miami
Elder convicted of defrauding church members, others out of millions
sun-sentinel.com
Posted November 1 2002, 2:13 PM EST
MIAMI An elder in the Jehovahs Witness church was convicted on Friday of defrauding elderly and financially unsophisticated church members and others out of millions of dollars.
Federal prosecutors said Raymond L. Knowles, who lists addresses in Opa-locka, Pembroke Pines and San Antonio, preyed upon members in his congregation and others by persuading them to invest in promissory notes and promising them an annual return of 8.5 percent to 9.25 percent. The notes were worthless.
Through his company, All Diversified Financial Services Inc., Knowles issued more than $533,000 of the notes, the federal indictment stated.
To perpetuate the scheme over a number of years, the government said, Knowles used a Ponzi type scheme that used funds obtained from later investors to make payments to early investors. He also diverted investor funds to lease luxury cars for his and his wife's personal use, and to pay personal, business and other expenses, including trips to South Africa and Disney World, the government said.
In all, Knowles was convicted of 16 counts of mail fraud, four counts of wire fraud and four counts of securities fraud. He faces a maximum of five years of imprisonment for each mail and wire fraud count and a maximum of 10 years in federal prison with respect to each of the securities fraud counts.
A sentencing hearing is scheduled for Jan. 9 before U.S. District Court Judge Donald L. Graham.
