The whole lousy deal started for Milt Heinemann, as it does so often in Arizona, on a golf course. In 1990, a friend introduced the retired engineer to an affable fellow duffer from Minnesota named Bob Pomerenke.

During their round, the name of Pomerenke's son John came up. John Pomerenke was said to be a wizard at playing the stock market. The young man had made millions for himself and those for whom he invested.

Bob Pomerenke and Milt Heinemann became regular golf buddies. Pomerenke told Heinemann he and his wife Lois had turned over their life savings to their boy to invest. The investments were earning about 5 percent per month, Pomerenke said, a remarkable profit.

A grandfather in his mid-70s, Heinemann says he was aware of the adage, "When it sounds like it's too good to be true, it probably is." But he wanted to hear more.

Soon, Heinemann met the 23-year-old John Pomerenke for the first time.
"The word 'con' did not come to mind," Heinemann says. "He's faceless, no personality to speak of. He wasn't a fast talker, which was a plus. I thought I was dealing with a computer nerd."
Heinemann was more impressed with the youth's luxurious Mesa home, his fleet of fancy cars and his spectacular swimming pool, replete with a waterfall and state-of-the-art lighting system.

The plaques and photographs on the walls of Pomerenke's penthouse office suite provided testament to his connections. One prominently displayed photograph showed Pomerenke shaking hands with then-Vice President Dan Quayle.

Heinemann took comfort that Pomerenke seemed to be a God-fearing, tithing young man whose personal life revolved around church--he had opened a Christian bookstore for his mother--his family and his knack for making money.

"I asked him, 'How do I know about your fiscal performance?'" Heinemann says. "He pulled out a file with all these positive numbers on it."
The documents bolstered Pomerenke's claim that he was a master at stock trading, an art form that takes wisdom, guts and luck.

Pomerenke's prospectus showed in words and graphs that he had never had a losing month since he'd started investing in 1987. The brochure claimed Pomerenke's accounts were insured by a New York City firm that in turn was insured by the famed Lloyd's of London.

Heinemann invested more than $100,000 with John Pomerenke, a hefty chunk of his life savings.

All appeared fine for more than a year after Milt Heinemann cast his financial fate with Pomerenke. Like clockwork, Pomerenke mailed Heinemann a computer print-out that indicated, as promised, his investments were earning about 5 percent each month.

Pomerenke's "management fee" of 10 percent of the net monthly earnings seemed fair compensation for the fabulous job he was doing. Heinemann says he figured to double his original investment before long if everything stayed on track.

But there was something neither Milt Heinemann nor any of Pomerenke's other 200 investors knew about John Pomerenke: Pomerenke hadn't been investing their money. Instead, he was running a scam that would ruin hundreds of residents, most of them elderly Christian folks residing in the East Valley.

In the summer of 1991, Heinemann and most of the others learned John Pomerenke was a thief.

Records indicate John Pomerenke collected more than $8 million from investors before the state Attorney General's Office shut down his business in October 1991. He had actually invested less than $1 million of that sum on behalf of his clients. Before he was caught, Pomerenke spent about $5 million of other people's money on homes, property, first-class vacations and cars--many, many cars--for himself, family members and friends. And that insurance protection Pomerenke had promised Milt Heinemann and the others? It never existed.

What Pomerenke had pulled off is known as a Ponzi scheme, named in tribute to Charles Ponzi, who was nabbed for perpetrating it on investors in the early 1920s.

A Ponzi works like this:
A financial adviser collects money from a client, ostensibly to invest. The adviser issues checks to the client from the interest the investment is said to be earning. To avert suspicion, the adviser covers the check with a small piece of the client's original investment, or with money collected from new suckers. There are no earnings because the adviser has stolen the money instead of investing it.

A la Ponzi, Pomerenke returned about $3 million to investors as his scam ran its course. He and state prosecutors say nothing is left for restitution, though most of his investor-victims don't believe that for a second. They remain convinced he stashed away bundles in the Cayman Islands, whose banks have become as renowned for their secrecy as those in Switzerland.

But others continue to believe in John Pomerenke, saying he would have made back the money he "lost" if authorities and skittish investors hadn't hounded him.

Pomerenke himself seems candid about his crimes. "It was like taking candy from a baby," says the Camelback High School dropout whose best job before becoming a self-proclaimed financial wizard was as front-desk manager of a Mesa motel. "I was the biggest liar around, but everyone thought I was such a wheeler-dealer."

@body:"He doesn't walk into a room and overwhelm it like so many white-collar cons do," says assistant attorney general Sherry Stephens, who calls John Pomerenke the most unusual con artist she's come upon in her 12 years on the job. "When you meet him, he's not dynamic. He speaks ungrammatically. You ask yourself, 'How in the world could he have pulled this off?' But you don't get a good answer."

There seemed to be no hint in Pomerenke's early life of what was to come. Raised in a farming community of 200 in southwest Minnesota, he was one of Bob and Lois Pomerenke's five children.

The Pomerenkes were decidedly middle-class: Bob Pomerenke ran a bowling alley, his wife owned a Christian bookstore.

John Pomerenke says he and his siblings were raised to believe that family and belief in Jesus Christ were most important in life. Enticed by the warm winters, the Pomerenkes moved to Arizona in the mid-1980s.

The family loved its adopted state and found contentment in the familiar environs of church and home life. John Pomerenke seemed to be getting along fine. Not the rebellious type, Pomerenke says he attended church regularly until he was sent to prison. Drugs and alcohol? He wasn't interested. Cigarettes? Not a chance.

Clean-cut and unfailingly polite, Pomerenke was a young man you'd want your daughter to go out with--though she probably wouldn't have been interested.

It wasn't as if Pomerenke immersed himself in academic pursuits. Though he had a mind for numbers that came in handy later, he was a mediocre student who admits, "I had a hard time making B's before I dropped out."

When Pomerenke was 17, the owner of a Regis Inn motel in Mesa hired him. Over time, he worked his way up to a position as the motel's front-desk manager. It was during Pomerenke's three-year tenure there that he began playing the market.

He didn't set out to be a crook. Pomerenke started his investing in 1986 by following the ups and downs of volatile penny stocks on the Financial News Network. He says he took out a subscription to the periodical Pennystock News, then invested a few hundred dollars of his own in a stock.

Lo and behold, he quickly sold it at a neat profit.
It was cake. Buy low, sell high. Make money.
Pomerenke told a few friends how well he was doing. They gave him a little money to invest, which he says he did with success. He graduated to the Wall Street Journal.

By 1988, Pomerenke had convinced his parents and church members of his supposed moneymaking abilities. That April, he quit his motel job and became a full-time "financial planner." He formed J.P. Lawrence and Company, a form of his complete name, John Lawrence Pomerenke.

But Pomerenke never registered with the state, nor did he take courses that would have provided the fundamentals of his new career.

None of that mattered to Pomerenke's rapidly growing list of clients. He didn't have to advertise. They came to him through the word-of-mouth grapevine of his family and church members. Even the owner of the Mesa motel would become one of Pomerenke's investor-victims.

Shirley Brannan was one of the many people who heard about Pomerenke's alleged financial miracle-making.

"I saw the setup in his office--all his computers--and I was impressed," says Brannan, a retired schoolteacher who lives in Ahwatukee and met him through church. "I thought, 'Here is a young Christian man who is helping other Christians make money.' But I guess we Christians are gullible, too."
Pomerenke wound up stealing about $43,000 from Brannan and her aged parents.
Because he wasn't a registered stockbroker, Pomerenke says he made his stock investments through the firm of Charles Schwab and Company, which served as a middleman.

But Pomerenke was too inexperienced, too impatient and too unlucky to beat the market. Before long, he had lost almost everything. In response, he became a criminal.

"The investors thought I was making tons," he says, "but I was getting killed and I didn't know what to do. So I lied."
Did he ever. By 1990, Pomerenke wasn't investing any of the millions his ever-growing client list was forking over. He says he started another company, International Asset Management, to try to turn his luck around. It, too, failed miserably.

Pomerenke kept afloat by continuing to attract new clients, ideally those with deep pockets. On the surface, his businesses seemed to be growing at a furious pace.

"I would pray to God, 'Help me make money,'" Pomerenke says. "But I was beyond the point of no return."
He had been seduced by the easy con. Records show that during a two-year period, Pomerenke bought an Aston Martin for $250,000, two Lotuses for $80,000 and $40,000, respectively, two Jaguars for $65,000 and $55,000, two Range Rovers for $40,000 each and a Lincoln Continental for $30,000. He paid for the fleet with investors' money.

Between 1989 and October 1991--when the AG's Office closed him down--Pomerenke vacationed in the Caribbean 12 times, as well as taking extravagant trips to Australia, Hawaii, New Zealand and Fiji. Not content with public transportation, Pomerenke hired a private jet for each of these trips at $15,000 per pop.

Pomerenke was generous with his stolen funds. He paid his mother and father about $36,000 a year each. He paid his two sisters $36,000 and $24,000, and his brothers $30,000 and $18,000, respectively.

He made no pretense of trying to turn things around. At his office, Pomerenke would play darts far more often than he played the market. He spent hours at the Christian bookstore he had opened for his mother in Mesa--it was called Rainbow of Promises.

@body:John Pomerenke is trying to explain how he turned his daydreams into nightmares for hundreds of folks.

"I always thought money was for rich people until I came to Arizona," he says in a jailhouse interview.

"After I lived here a while, I realized money can be for anyone. I wanted to make a lot, and fast. The whole thing snowballed."
As advertised, Pomerenke is more Walter Mitty than Michael Milken. He doesn't come across as particularly keen. He has a limp, clammy handshake, chalky white skin and is balding faster than any 25-year-old should have to.

"I know a lot of people who believed in me now think everything about me is a fake," Pomerenke says, staring out through wire-rimmed glasses that give him a bookish look. "But I was myself when I was in business, though I did some bad things, and I'm being myself now."
A few days before, Superior Court Judge Ron Reinstein had sentenced Pomerenke to what should amount to five years behind bars. Being locked up is a relief, Pomerenke says, and he seems to be telling the truth.

"I don't have to think about how much longer I'm going to get away with stealing," he says, "or if some investor is going to take a bat to my head."
Pomerenke says he plans to take classes in sociology during his years in prison. More than that, he says, he is looking forward to another aspect of his stay.

"I want to study the criminal mind," he says. "It's a lot easier than you might think to become a criminal."
Pomerenke hadn't spent a minute behind bars until Judge Reinstein sentenced him. In fact, he spent much of 1992 living at his brother Mark's apartment in Tempe. If everything is gone--the homes, the cars, everything--he is asked, how did he survive?"

"Unemployment comp," he says. "$175 a week."
Asked how he feels about having wrecked so many lives, Pomerenke smiles briefly, emptily.

"Of course I feel bad," he says blandly. "I have God, but just because you have God doesn't mean you're perfect."
Pomerenke pauses. "I wanted to spread the word of God even when I was ripping people off," he continues without a trace of irony. "I've always been religious-minded."

He pauses again, as if he's weighing something more revealing. But he's not. That's all John Pomerenke has to say on the topic of remorse.

"There are always going to be people looking for a great deal," he says. "I offered them a great deal."
@body:The beginning of the end for John Pomerenke came in August 1991, when Farrel Porter demanded $300,000 from his account.

Pomerenke was vacationing in Australia at the time, and his secretary telephoned him with the news. Trouble was, Pomerenke only had about $150,000 on hand.

"I told her to lie and say we were having a little trouble getting the money out," he recalls of the conversation. "I was scared shitless."
Pomerenke says he toyed with the idea of changing his identity and running for cover. But new investors were signing on all the time. Maybe he could bluff Porter until he could rake in another $150,000.

Two weeks after his secretary called him, Pomerenke flew back to the United States. Hoping to pacify Porter, Pomerenke gave the investor all the money he had available. Then, he told his staff the money was all gone. They quit on the spot.

But Pomerenke wasn't done yet. In the two months before the October 1991 raid of his office by state authorities, he collected thousands of dollars from unsuspecting old and new investors who continued, says his onetime secretary, "to worship the ground he walked on."

One investor forked over $15,000 a few days before the state shut Pomerenke down for keeps. "He knew he was going under," Dennis Erickson says. "He was cold-blooded and has no heart." Erickson never got his money back.

When word of the raid got out, Pomerenke's investors panicked, doubly so when they couldn't locate him. Pomerenke says that only his parents and a few others knew he had moved out of his opulent digs into a hotel off the Black Canyon Freeway.

Cases against white-collar criminals aren't easily put together and, as state prosecutors slowly sifted through the evidence, Pomerenke hired a blustery barrister named Donald "Mac" MacPherson. Best known for his work on behalf of former governor Evan Mecham, MacPherson tried to bully Pomerenke's confused and angry clients with a hard-edged missive.

"The investors and their attorneys should be aware that we will not take harassment lightly," MacPherson warned. "In the event of continued harassment by way of trespass, we intend to seek full redress under Arizona law."
All this was a delaying tactic. Pomerenke wouldn't be summonsed to Maricopa County Superior Court until last August on charges of felony theft. But life as he had known it for three wild years was over for John Pomerenke.

@body:Many of John Pomerenke's victims and few remaining friends packed into the courtroom of Superior Court Judge Ronald Reinstein last October 15. The hour of Pomerenke's sentencing finally had arrived.

Among those looking on was a Mesa woman who had expected her investments to cushion her retirement years. She now sells homemade bread to help pay the bills. There were the parents of a handicapped woman from whom Pomerenke had ripped off $40,000.

And there was Milt Heinemann--the guy who had had the misfortune to meet Pomerenke's dad on a golf course.

To this day, no one but Pomerenke has faced criminal charges in the scam. His parents--who are said to be managing a small motel in a Missouri town--denied wrongdoing in a civil suit filed by many of the investors against them and John. Prosecutor Sherry Stephens says investigation into the scam "is continuing."

A few months earlier, prosecutors had agreed to let Pomerenke plead guilty to two theft counts. Each charge carries a maximum sentence of ten years, but Pomerenke's plea bargain called for the chance of parole after five years. Adult-probation officer Preston Dobbins opposed the deal--that rarely happens in the county's criminal-justice system--and recommended the maximum sentence. "One cannot help but be filled with a sense of outrage," Dobbins wrote in his presentencing report.

He cited the case of a retired Canadian couple who spent winters in the Valley, sold their family farm in Alberta and invested almost everything--it came to $462,000. "We are only able to buy a small amount of food to what we are used to," the couple had written Dobbins. "Life is like being a prisoner."

Judge Reinstein asked Pomerenke if he wanted to say anything.
Pomerenke mouthed the right words--sorry," "forgive," "forget"--before concluding, "I look forward to get out and start paying back to the investors."

It was time for the victims to have their say.
"There are people dependent upon social security now," said investor Jack Sample, who lost about $34,000. "For a man to hide behind a faade of bilking the people under Christianity is about the lowest I think a man can go."
Marvie Nothstine called Pomerenke's scam "just a smaller scale of Keating. . . . How is he ever going to pay restitution? He doesn't even have a high school education!"

Not everyone, however, was there to condemn Pomerenke.
"We volunteered on our own to give him the money," said Mesa resident Susan Bingold, drawing hoots from the others. "As investors, we are also guilty for not calling for an audit on his company. We all went on faith, myself included and our family. . . . We all are as guilty as John in some areas."
That was more than many in the courtroom could take.
"Give me a break, lady," someone yelled at Bingold, bringing a caution from Judge Reinstein.

Investor Roy Francis demanded a life sentence.
"That was our life savings," he said, addressing Pomerenke directly. "Now, we are at square one. We have nothing. We are starting all over."
It was the judge's turn. Reinstein told Pomerenke he had considered rejecting the plea bargain, but that he would go along with the deal.

"Remorse just doesn't cut it at this point in time," the judge told Pomerenke, before ordering him to the state prison. Pomerenke will be 30 years old when he becomes eligible for parole.


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