A Louisiana businessman was arrested Thursday on charges he engaged in a Ponzi scheme that cost at least 200 investors more than $11 million, money he allegedly used to finance a lavish lifestyle.
William J. Chaucer Jr., 60, of Ponchatoula, used money invested in his loan companies to pay for more than $400,000 in Mardi Gras expenses, $5,500 worth of plastic surgery and thousands more for his wife to compete in pageants, authorities said.
Chaucer was arrested at his home and booked into the Tangipahoa Parish jail on charges that included felony theft and selling unregistered securities. A judge didn't immediately set bond.
Chaucer is the owner of Chaucer Holding Company and several other companies in Hammond, Covington and Ponchatoula. His wife, Cheryl, hasn't been charged with any wrongdoing.
District Attorney Scott Perrilloux said Chaucer operated his financial companies for roughly 20 years without any complaints and, until recently, delivered on promise of high rates of return on investments.
"I think you would find he never missed a payment up until he closed," Perrilloux said. "That helps build trust in the next potential investor."
None of Chaucer's investors have been paid since he closed his companies in September, authorities said. The amounts of their individual investments ranged from $10,000 to $417,000.
"For some of the people who invested with this guy, this was all the money they had," said David Caldwell, head of the public corruption and special prosecutions unit for Louisiana Attorney General Buddy Caldwell.
A phone number listed for Chaucer was disconnected and a Caldwell spokeswoman said she didn't know if he had an attorney.
Between early 2008 and March, Chaucer allegedly diverted around $800,000 from his businesses to pay for personal expenses. Those expenses included membership fees for Mardi Gras krewes in New Orleans, $11,800 for cosmetic dental work, about $20,000 in jewelry and nearly $6,000 for his wife's participation in a Senior America Inc. pageant.
Cheryl Chaucer was named Ms. Louisiana Senior America 2008, according to the pageant's Web site. Her profile on the Web site says she is a singer who has performed with Fats Domino, Pete Fountain and other renowned New Orleans musicians.
"The highlight of her musical career was when she was invited to tour 4 military bases with the infamous Bob Hope and his USO show," said the profile, which also listed her as a part-time consultant for Chaucer Holding Company.
Sam Dileo, a lawyer who invested money in Chaucer's businesses, said Chaucer and his wife threw parties so lavish that he grew concerned about his investment.
"I've been to a party at the White House. This was more extravagant than that," Dileo said, recalling bands playing and expensive champagne and food being served. "That not only concerned me. That concerned a lot of people."
Dileo said he is weighing filing a lawsuit against Chaucer on behalf of himself and more than 20 clients, but he isn't optimistic that they can recover their money.
"He was a fine man. I didn't suspect anything in the beginning," Dileo said.
At least one group of Chaucer's investors has sued Chaucer and his companies. Their lawyer didn't immediately return a call for comment Thursday.