When Ziegler arrived—the crowd believed him to be the president of Fidelity International Bank—they broke into applause. After waving at a few familiar faces, Ziegler, who wore a flowered shirt and a gold necklace, announced that he’d just flown in from Hawaii. “He tried to project that he was a bon vivant kind of guy,” Karalekas recalls. “He was very confident.” But Ziegler also portrayed himself as a regular person—someone just like them, but one who also happened to be a multimillionaire.

For the next hour, Ziegler strode back and forth, giving his pitch, smiling in earnest, explaining the beauty of his risk-free investment opportunity: By purchasing a 10-year $10,000 Private Legacy Trust CD with Fidelity International Bank of Nauru, each and every person in the room would get a 20 percent annual return on the money. Of course, they could always invest more, which would net even greater returns. Best of all, their money was 100 percent safe. The bank was backed by the IDIC after all, and it had $101 billion in assets.

During the Q&A period, no one asked why a bank president presiding over billions of dollars might take the time to deliver a pitch to low-level investors in a rented conference room. “Most of them were gullible; they wanted to believe,” says Karalekas. Not one person wondered out loud whether it was too good to actually be true. Ziegler was a man who had learned how to build real wealth, and who now, out of the goodness of his heart, wanted to share this good fortune with others. After the presentation, attendees broke into groups to pore over paperwork.

Karalekas immediately recognized the pitch as a scam—and a likely Ponzi scheme. Named after Carlo Ponzi, an Italian immigrant who in 1920 defrauded thousands of people by offering a 40 percent return if they invested in his international postage-stamp program, Ponzi schemes pay back “interest” with money scammed from new investors—payments that eventually stop coming.

A couple of weeks later, Karalekas attended another Fidelity International Bank pitch meeting, this one in a rented office in a Tigard strip mall, where specific questions from investors were waved away with the explanation that “a lot of things are confidential.” In June 1998, Karalekas and the Tigard police raided these offices, taking computers and papers. They soon found evidence of securities fraud, mail fraud, and wire fraud, as well as the names and addresses of hundreds of investors. It also turned out that investors’ checks had crossed not just state lines, but international borders, all of which meant that a state investigation was now a federal one that had to be turned over to the US Department of Justice.