Investors describe how they lost their money

Kim Smith

Monday, Jan. 28, 2002 | 9:40 a.m.

Husbands and wives. Mothers and sons. Daughters and mothers. Cousins. Friends.

First one would invest and then the other.

In all 1,174 people gave Franklyn Perry tens of thousands of dollars, confident their lives would soon be better.

Instead many of them found themselves appearing before a Clark County grand jury providing prosecutors enough information to get Perry indicted on a record-setting 517 fraud-related counts.

Perry is scheduled to be arraigned on the charges Wednesday.

Grand jury transcripts released Friday give a glimpse into how prosecutors say Perry was able to bilk so many people out of at least $40 million -- only $23 million of which has been recovered by police.

Each of the 50 people who appeared before the grand jury between Nov. 1 and Jan. 17 gave the same story:

They heard about a risk-free investment opportunity from a trusted loved one or friend and agreed to meet with Perry.

Perry would tell them that one of his many businesses involved lending high-rollers cash when they ran out of credit at such casinos as Caesars Palace and the Aladdin.

In exchange for a minimum investment of $10,000, Perry told them, they could get a return of anywhere from 80 percent to 123 percent within a four-month period.

Most people testified that after consistently getting a monthly return of $2,000 on a $10,000 loan, they felt comfortable. As a result they reinvested and subsequently lost everything they gave to Perry.

They were often so comfortable, they would bring a loved one into the deal for a finder's fee -- 10 percent for every $10,000 invested.

Perry had other ways of making them comfortable, investors testified.

Explaining that the casinos he dealt with had a comp program, Perry regularly reimbursed his investors for every dinner, every show, every shopping spree they took in at that particular casino.

All they had to do, Perry said, was bring him the receipts.

Lynda Glenn invested $10,000 in April 2001, just weeks before Perry was arrested on unrelated sex charges. Perry gave her $500 and suggested she go on a shopping spree at Desert Passage.

When asked what she bought at the shopping mall, Glenn told Chief Deputy District Attorney Christopher Laurent, "a $10,000 Kitchenaid food processor."

The food processor was the only return she saw on her investment.

Perry also gave his investors a phone number to call in the event of his death. If something happened to him, he said, they would be reimbursed by the person on the other end of the phone.

None of the investors called the number until after Perry's arrest. It just rang and rang and rang.

Some of Perry's alleged victims cashed in stocks and others raided their life savings to invest. One sold his Harley-Davidson motorcycle.

Most told grand jurors they weren't hesitant at all.

"It sounded to me, it was logical, you know, if the high rollers come into town with lots and lots of money and they lose it, and they want to win it back. It sounds logical to me, " Pauline Konold said.

Perry "looked quite honest," Konold said.