ALBUQUERQUE (KRQE) - It looks like prosecutors have the smoking gun in the case of alleged ponzi schemer Doug Vaughan, the first hand account of the person who saw it all go down.
Martha Runkle who kept the financial records for Vaughn has made a deal with prosecutors in exchange for her testimony.
Doug Vaughan is accused of running the biggest ponzi scheme in New Mexico history, swindling investors out of $76 million and using the money to live a lavish lifestyle, as his business suffered.
Prosecutors say behind the scenes was his faithful accounting manager, Martha Runkle. In a recently unsealed plea agreement Runkle admits she knew of the ponzi scheme and helped cover it up at the instruction of her boss.
Runkle says while the investment program began in 1994, it was in 2000 that she realized it was losing money. By the year 2009 she says Vaughan owed more than 600 investors more than $74 million but never spoke a word about it.
Runkle also admits she helped bring in one new investor at her boss' urging to help pay off other investors waiting for their checks. Also, when new money came in she quietly pulled out her $20,000 investment while other investors were left with nothing.
For her actions Runkle was indicted on charges of aiding and abetting wire fraud. With her guilty plea, Runkle faces 20 years in prison, must pay $50,000 in restitution to the investor she helped lure in and must testify against Vaughn.
Runkle's attorney Michael Hinton told News 13 by phone that at the time Runkle did not know what she was doing was criminal and once she was indicted learned the best course of action was to plead guilty and help prosecutors.
Vaughan is facing 30 counts of money laundering, mail and wire fraud and false writing of documents. If convicted he faces nearly 500 years in prison.
Court documents show during the time his investors were losing money, Vaughn was still paying himself well. In 2005 when the scheme saw it's worst days Vaughan paid himself more than 3 million dollars. In 2006 it jumped to 4 million and in 2007, 2008 and 2009 he paid himself $5 million a year.
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