Nichols Notes Special Edition - June 22, 2004

Recently we mentioned the article in Northwest Florida Daily News on Frank Hendrix and associates and the alleged looting of PAI. We now have permission to bring you that article in full. We wish to thank Tom McLaughlin and the Daily News for this article.

Feds seek seizure of homes

By TOM McLAUGHLIN Daily News Staff Writer

SHALIMAR , FL -- The federal government is taking steps to seize two homes in the Poquito Bayou area, alleging they were purchased with money from illegal activities. The U.S. attorney's office in Portland , Ore. , filed a complaint in U.S. District Court in March for forfeiture of the properties, and is now in the process of publishing legal notices announcing the government's intention to take the homes. Federal officials allege that Frank Hendricks and Marusha Wowdia bought homes at 45 Poquito Road and 14 Warwick Drive with money that Hendricks acquired from people across the country in a fraudulent investment scheme.

Federal law allows for the seizure of property purchased with illegally obtained money. In this case, the government claims the homes are subject to forfeiture because they constitute "proceeds derived from wire fraud" and were properties "involved in money laundering." Criminal charges have not been filed in the case.

"The case is under investigation," said Leslie Westphal, an assistant U.S. attorney in Portland . "If a grand jury chooses to indict, that will be made public." According to an FBI affidavit filed with the complaint for forfeiture, Hendricks and Wowdia were engaged at one time and continue to share the 45 Poquito Road home. Various efforts by the Northwest Florida Daily News to reach them for comment were unsuccessful, as were attempts to locate two attorneys for Hendricks' former business who are mentioned in the affidavit.

An FBI investigation initiated in Oregon late last year determined that Pacific Achievements International, a company founded by Hendricks and Washington state resident Scott Guenther, collected about $11 million from investors from August 2002 to December 2003.

Court documents indicate that investors sent money, typically a sum of $5,859, to become "benefactors" in PAI's Internet-based marketing program. Each investor was promised a bonus within 30 days of buying into PAI. The bonus promised was always greater than the original investment--$9,720 in the case of a $5,859 investment. The company returned to investors approximately $2.2 million of the $11 million it received, the FBI investigation found. Most of the returned funds went back to early investors as new investors sent money.

The FBI, however, found that PAI "never engaged in an income producing business," and at some point the bonuses stopped being sent. As investment money continued to come in, Hendricks and Guenther used some of the funds they received to buy homes, the FBI found. According to an affidavit by Oregon-based FBI Special Agent Joseph Boyer, Hendricks said he used investor funds to buy the residence at 45 Poquito Road for $523,000 in November 2003. Title to the home is in Wowdia's name, the affidavit says.

Hendricks also told Boyer he bought the home at 14 Warwick Drive for $190,000 in December 2003. The property was purchased in the name of Excaliber, a holding company owned by Wowdia. Neither of the property purchases were undertaken with permission of PAI investors, the court documents state.

Len Register, managing assistant for the U.S. attorney's office in Pensacola , said that a conviction on criminal charges is required before owners can actually be forced to forfeit their property. But he said it is not unusual, federal officers to serve notice of their intention to seize property before charges are filed. "If the suspects involved in the investigation know you're coming, if the investigation is out in the open, sometimes it's prudent for the government to take steps to maintain the status quo," he said. "Sometimes targets begin to liquidate holdings to raise money for their defense or to hide assets."

A grand jury decides what actual charges will be filed in a criminal case, and the grand jury can also propose a "forfeiture allegation," Register said. The forfeiture allegation sets up a second hearing to be held after the criminal case if a conviction is obtained. Victims in a fraud case can request that money generated through the liquidation of forfeited property be given to them as restitution, Register added. "If the government recovers money, it's highly likely" that victims will recoup some or all of their losses, Register said, but it's not a sure thing. "A lot of victims get caught holding the bag," he said.

Staff Writer Tom McLaughlin can be reached at 1-850-863-1111, Ext. 435, or tomm@nwfdailynews.com

We hope that this gives you a better picture of what may have happened with your money and what your prospects are for recovery.

Nichols Notes

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Nichols Notes Special Edition - June 22, 2004

Feds seek seizure of homes

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