Grand jury indicts 10 in alleged Sterling Group fraud scheme

"This was possibly the largest investment scam in the history of Nevada, because there were 2,000 investors nationwide and millions and millions of dollars that had been scammed," said Frankie Sue Del Papa, Nevada attorney general.

"America's Most Wanted" carried items about defendants in the case on three separate national television programs, including a video of the arrest of Eric Stein, former managing partner of the Sterling Group. Stein was a fugitive for a year when Chula Vista, Calif., police stopped him in a sport utility vehicle near the U.S.-Mexico border.

At the time, Stein and stepdaughter Ina Bell faced criminal trials in state court. The state criminal case against Bell has been dismissed, and Gabe said he is dropping charges against Stein as well and focusing on the federal case.

The defendants are accused in Tuesday's indictment of cheating investors who provided money to buy investment units of $5,000 each.

Investors were told the money would be used to buy television air-time for water-filled dumbbells, pet tags that talked, KenKut plastic wrap dispensers, "Xmas Tree Alarm" smoke detectors, zipper ties which zipped into French knots, and pet hair vacuums.

The government, however, said that defendants were conducting a Ponzi scheme, in which funds from new investors were paid to previous investors "in the guise of profits." The scam started in December 1996 and continued until March 1998, according to the indictment.

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