URBANA, Ill. (AP) -- Thousands of investors who bought into a fraudulent moneymaking scheme that netted $20 million did not seek restitution because they still believe the scam will pay off, according to prosecutors.
Of the 10,000 people who invested in Omega Trust and Trading, 368 filed legitimate claims with the federal government to recover their money. Those claims, totaling $1.69 million, were approved Thursday at a restitution hearing by U.S. District Judge Michael McCuskey.
A deadline to file for restitution has passed, and no further claims will be accepted by the federal government. Investors whose claims were accepted could be paid within the year.
U.S. Attorney Esteban Sanchez said most major investors in the scheme are aware that Omega's 19 organizers have either pleaded guilty or been convicted of running the scam, which promised a 50-to-1 return.
However, he said most declined to file for restitution because they believe Omega will eventually come through with their promised payments -- though no investor has ever been paid.
"A great majority of people, this vast group out there, still believes that this big truck of money is going to come in despite all of our efforts to tell them it won't," he said. "I was very surprised. We were expecting thousands of these people to submit claims."
Omega organizers, based in Mattoon, persuaded customers throughout the world to lend them money to invest in phony offshore banks. Omega victims were promised a 50-to-1 return and the chance to roll that over three more times for multimillion-dollar profits.
The duped investors were solicited over the telephone and Internet.
Investors continue to discuss Omega in Internet chat rooms and were reluctant to file restitution claims because they feared it would interfere with eventual payments, Sanchez said.
"We've had people call and say, 'If I submit a claim, will I be denied the (Omega) funds when it comes?"' Sanchez said.
Judge McCuskey said he has been mailed countless letters from investors vouching for the legitimacy of the Omega scheme -- though most admit they never met any of the Omega organizers.
"It's interesting how the veil continues out there on the Internet," the judge said.
Sanchez said the attorneys office will continue to investigate activity among Omega investors. He would not say whether there was any evidence that money was still being solicited under the guise of Omega.
Omega was founded and run by Clyde Hood, a 66-year old retired electrician who orchestrated the scam with his wife and kept customers at bay with elaborate excuses about delays caused by bankers and government officials.
Hood was sentenced last week to 14 years in federal prison, the last of the 19 people indicted in August of 2000 to be sentenced.
Hood cooperated with the government in bringing down many of his 18 co-defendants. He pleaded guilty to money-laundering conspiracy, mail/wire fraud conspiracy and filing a false income tax return in exchange for having 14 other charges dropped.