INDIANAPOLIS (WISH) — A Westfield man will serve five years in prison after he was convicted of wire fraud and money laundering. He will also have to pay more than $1.5 million in restitution.
George Blankenbaker Jr., 56, of Westfield, was charged with wire fraud and money laundering in April. The charges came after an investigation by the Internal Revenue Service Criminal Investigation.
Investigators learned Blankenbaker created three business entities between May 2008 and August 2016 in order to use the businesses in a Ponzi and money laundering scheme.
The businesses he created were Stargrower Commercial Bridge Loan Fund 1 LLC, Stargrower Asset Management LLC, and EDU Holding Trust.
Blankenbaker convinced more than 100 people to invest more than $10 million in his businesses. Authorities say Blankenbaker told investors he was going to use their money to finance food shipping containers. Instead, he used that money to make interest payments and return of principle payments to other investors.
He also used the money to pay for personal expenses.
In total, 34 investors lost more than $1.4 million in that scheme.
Blankenbaker also used EDU Holding Trust to purchase life insurance policies and led investors to believe they were beneficiaries of the policies. Authorities say he deposited a $2.5 million check into an account for EDU Holding Esc after one insurance policy matured. He only gave some of those funds to the investors and used some of the money for business and personal expenses.
One investor in that scheme lost more than $100,000.