Las Vegas couple sought in scam

Perry Griggs was a white-collar criminal serving a sentence at a federal prison camp on Nellis Air Force Base in 2005 when he approached fellow inmates with a can't-miss financial opportunity: Get your relatives to invest with me, Griggs told them, billing himself as a millionaire commodities trader at the helm of "Aloha Trading."

Some inmates, most of them from Hawaii, believed his pitch. They persuaded their families to liquidate savings and obtain mortgage loans to invest in his program -- to the tune of about $3 million, according to a scheme outlined by FBI agents.

Little did they know that Aloha Trading was a front and Griggs was a con man, authorities said. The operation he ran in prison was exactly like the one that got him sent there in the first place -- a Ponzi scheme. His investors' returns were derived from their principal investments and money from later investors.

"He pleaded guilty to it (running a Ponzi scheme), then allegedly decided to launch the same thing within prison walls," said Tom Simon, an FBI special agent based in Honolulu.

A nationwide search was launched Monday for Griggs, 49, and his wife, Rachelle Griggs, 42, after they were indicted in Honolulu last week on 13 counts of wire and mail fraud.

The scheme took place between 2005 and 2009, and there are at least 12 victims. Nine of the victims are from Hawaii.

Simon said this isn't just a case of a criminal stealing from other criminals. In most cases, it was the relatives of the inmates who lost their wealth and their homes.

At least one Hawaii company also fell for the bait. Six victims invested big bucks in Paradise Trading -- which then invested the money in Aloha Trading. Paradise Trading has not been charged, but the FBI investigation continues, Simon said.

"One of those was a very nice grandmother who lost her home Friday," he said. "They felt they were investing with a local business, but in reality they (Paradise) were just passing it along to Perry Griggs."

When Griggs was at the prison camp on Nellis from 2003 to 2005, his wife lived in Las Vegas, using the city as the fake company's base. When he was released from prison in 2008, he rejoined his wife in Las Vegas, where he focused his efforts on securing money for the Ponzi scheme, Simon said.

His clients became suspicious by the end of 2009, and in January 2010, the two were completely off the grid, Simon said. Las Vegas was their last known location.

They canceled their car insurance. They emptied their savings accounts. And they dumped their cell phones in the garbage.

Simon said they suspect the couple has at least a million dollars at their disposal and the resources to travel anywhere.

Although authorities are scouring the country, they are placing a particular focus on Nevada, Washington and California. Griggs had served part of his sentence in a California facility and also had ties to Washington.

Griggs, who stands 5 feet 10 inches and weighs 180 pounds, was described as a high roller with an affinity for sports cars, expensive clothes, cigars and golf.

Wife Rachelle Griggs, also known as Rachelle Rutledge, is 5 feet 4 inches tall, weighs 150 pounds and has blond hair and green eyes.

Griggs has been known to show off money, sometimes in spectacular fashion.

In 2007, when Griggs had a year left on his sentence, the Bureau of Prisons transferred him from a facility in El Paso, Texas, to one in Lompoc, Calif.

In a cost-saving measure the government often employs with minimum-security inmates, Griggs was given a bus ticket and told to get himself to Lompoc or risk becoming a fugitive and having years added to his sentence.

Griggs had no intention to run from the law, but he apparently didn't care much for buses.

Instead, he used $18,000 of the money from investors and chartered a Gulfstream jet to take him from Texas to California -- with a pit stop in Las Vegas to visit his wife before voluntarily returning to jail, Simon said.

"He wanted to create the impression of being an individual with extreme wealth and resources, but it was all a lie," he said.

The Ponzi schemes authorities have connected to Griggs -- the one that sent him to prison and the one he is alleged to have run from prison -- each took about $3 million from the victims.

Asked why none of the investors had checked Griggs' background -- and why anyone would take financial advice from someone already in prison -- Simon said he couldn't be sure.

But because most of the victims he's accused of defrauding already had relatives in prison, they may have had a different perspective.

"If your son is a prisoner, you don't have the most dim view of prisoners as we might have," he said.

Anyone with information regarding the couple's location is asked to call the Honolulu FBI office at 808-566-4300.

Contact reporter Mike Blasky at mblasky@reviewjournal.com or 702-383-0283.