Hinkle Changes Plea To Guilty
Richard Hinkle, the  Weatherly, Pennsylvania,  man arrested in Costa Rica and returned to the United States two years ago has pleaded guilty to federal charges that he defrauded approximately 30 investors of us$3.6 million.

Hinkle changed his innocent plea to guilty for one count of wire fraud on May 25 in a case that dates to 1999, wiped out savings of local investors, extends to larger scams worldwide and resulted in Hinkle’s kidnapping.

The new plea marks a reversal for Hinkle, a part-time minister who home-schooled his children to instill them with his religious beliefs and previously claimed through an attorney that he was a victim, too.

In February 2004, a grand jury indicted Hinkle on 10 counts of wire fraud and 49 counts of money laundering. He was extradited from Costa Rica where he moved after collecting money from investors in Pennsylvania and Illinois.

Under a plea agreement in U.S. District Court for the Middle District of Pennsylvania, Hinkle faces a maximum penalty of five years in prison, us$250,000 in fines, and three years probation after serving his sentence.

The court is required to order Hinkle to pay full restitution to all his victims.

Whether he has assets to make repayments is unclear. He was known to counsel investors how to shelter assets from creditors and taxes. His father had to post a house as collateral so his son could go free on bail.

But Richard Hinkle owned a clothing store and lived in a gated home with his wife and six children in Costa Rica in October 2003 when he was kidnapped. Costa Rican police rescued Hinkle after he spent three days in captivity and later took him into custody after he was indicted in the United States.

In his plea agreement, Hinkle promised to cooperate with the Financial Litigation Unit of the U.S. Attorney’s Office and prepare a statement of his financial resources.

The indictment against Hinkle says he took us$3.6 million from 30 investors and lists 14 of them by name.

He promised investors that they would earn 2 percent to 3 percent a month and repaid us$636,525 to assuage their concerns, the indictment says.

Meanwhile, Hinkle diverted us$75,000 to us$100,000 to his personal credit card, the indictment says.

While running his operations, Hinkle controlled Cornerstone International Savings Bank and used accounts in banks in Florida, New York, the West Indies, Costa Rica and the First International Bank of Grenada.

First International Bank of Grenada collapsed two years ago, costing its customers and customers of other banks that dealt with First International an estimated us$200 million. United States courts indicted six officers of the bank, including two who fled to Uganda. One of the defendants died, but the others await trial next year.

In 1996, Hinkle invested his money and that of at least three investors in a bank debenture trade and believed the money ended up with “a Mr. Robert Dare,” according to a 1999 letter that an attorney representing Hinkle then wrote to a lawyer for some of Hinkle’s creditors.

On Oct. 1, 2003, Robert Lee Dare was sentenced for money laundering and ordered to pay nearly us$1 million to approximately 90 victims. Dare promised investors that they would earn high returns on overseas investments.

A sentencing date for Hinkle, meanwhile, will be set after a pre-sentence investigation is completed for U.S. Judge Edwin M. Kosik in Scranton.

Originally, Hinkle faced maximum punishments of five years in prison and us$250,000 on each count of wire fraud. The money laundering counts each carried a maximum penalty of 20 years in prison and fines of us$500,000 or twice the amount laundered apiece.

Hinkle agreed to cooperate with authorities by providing full information about illegal actions by himself and others, submitting to questions by investigators, attorneys and grand juries, and even acting undercover to the best of his ability.

In return, the U.S. Attorney’s Office agreed not to prosecute Hinkle for other charges, except tax offenses, and the Internal Revenue Service can collect any delinquent taxes, interest and penalties arising from his crimes.

If Hinkle adheres to the agreement, the U.S. Attorney will recommend a sentence perhaps below guidelines if he provides substantial cooperation.

The judge, however, is not bound by any recommendation and will ultimately decide the sentence.