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A Sandy man was indicted Tuesday for allegedly running a Ponzi scheme that took in about $12 million from investors, who were told some of the money would go into a development of a human jet-pack rocket suit.

John S. Dudley, 56, was charged with 17 counts of money laundering and wire and bank fraud.

Between January 2007 and March of last year, Dudley held investment club meetings he sometimes called "bounce nights" or "Tashi group meetings," where he portrayed himself as a successful investor, said the indictment released Tuesday.

Dudley allegedly told potential clients they could expect monthly returns of 5 percent to 10 percent, that he had not suffered a trading loss since 1978 and never made less than 5 percent per month over the past 30 years. He also said that investor funds were backed by a "senior life settlement policy" that reduced or eliminated risk and that investing with him was an exclusive opportunity for a limited number of investors, federal prosecutors said.

Dudley advised potential investors to use an "equity mining" scheme to obtain investment money. He encouraged them to inflate their income or assets on bank documents to obtain loans for houses, boats or other luxury items that were for more than the items actually sold for, with the difference to be invested with him, the indictment states.

But instead of using investor funds as he indicated, Dudley paid older investors with money from new investors in what is known as a Ponzi scheme, prosecutors charged.

"Virtually all of investors' money was used by Dudley to either pay 'returns' to other investors or for his own personal use, including the purchase of two homes — a $1.5 million home in Sandy and an $860,327.63 home in Riverton; a down payment of $28,978.31 for a ski boat; and to pay for meals, airline tickets and gifts for his family," the U.S. Attorney's Office for Utah said in a news release.

Dudley's attorney, Michael J. Langford, said his client was in jail awaiting a detention hearing on Wednesday.

"My client maintains his innocence," Langford said. "We look forward to the responding to allegations in the indictment."

Between 75 to 100 investors gave Dudley more than $12 million, the indictment says.

If convicted, Dudley faces up to 30 years in prison on the bank fraud counts and lesser time for the charges, plus potentially millions of dollars in fines.

Twitter: @tomharveysltrib —

If you invested

I The John S. Dudley case was investigated by the FBI and the IRS. The FBI is asking alleged victims to call 801-579-1400.