'Despicable' $10 Million Ponzi Scheme Scammed 82, DA Says

A former bank president and insurance company worker cheated dozens of people out of their savings with a $10 million Ponzi scheme, Northampton County District Attorney John Morganelli said Friday.

Richard A. Freer, 67, of Palmer Township was charged Friday with 90 counts each of theft by deception and failure to make required disposition of funds, along with 50 counts of forgery and other related charges. 

The charges were the result of a grand jury investigation into what Morganelli described as "deceptive business practices" by Freer.

"This case is one of the most outrageous cases of theft I've seen," Morganelli told reporters at a news conference at the county courthouse. "It's a despicable case. It's a tragedy that lots of people have lost a ton of money because of Mr. Freer."

Most of them were senior citizens, Morganelli said, often unused to the world of investing. Freer hadn't even passed a "series six" exam, given to people who need a license to sell mutual funds and other sorts of investments.

Freer left Lafayette Ambassador Bank in 1991, and went to work for Aviva insurance company. He was still with them through part of the scheme, Morganelli said. 

The company fired him in 2009, but Freer allegedly continued to tell clients he was investing their money. Morganelli said Aviva issued a cease and desist order in July to tell Freer to stop claiming he was still working for them.

People give money to Freer, prosecutors say, thinking he was putting their money into real estate trusts. The reality was much simpler.

"He was taking everything he took from his victims into his personal account," said Assistant District Attorney Bill Blake, who oversees grand jury investigations.

Freer would either spend that money on himself, prosecutors allege, or use it to pay off other investors.

The case began with one one victim, who ultimately invested more than $400,000 with Freer and ran into trouble with the IRS due to her investment with Freer, Morganelli said.

She contacted an accountant, who immediately saw problems with the way Freer was operating, Morganelli said. The accountant contacted Freer, who said he'd taken care of the woman's IRS problems. In reality, Morganelli said, he'd simply paid her tax bill himself. 

The accountant talked to a lawyer, who brought the matter to the district attorney's office.

As the investigation began, more and more investors came forward.

Morganelli said most of the investments date from 2009, and continued to the summer of 2013, even as police had frozen Freer's bank accounts.

He and Blake say they're still investigating whether Freer's wife Beverly was involved in the scheme, and suspect there could be another $5 million to $6 million unaccounted for, as well as victims they haven't heard from yet.

Freer was arrested at his Tatamy Road home Friday morning, and was reportedly "very pale" when being taken into custody, Blake said.

He arraigned before District Judge Jacqueline Taschner Friday morning, and was sent to county prison in lieu of $10 million bail.

When asked what sort of prison time Freer could face if convicted, Morganelli replied "as much time as I can get for him. He deserves to die in prison."