<p>A real estate promoter was charged in a federal indictment unsealed Thursday with ripping investors off of tens of millions of dollars in a Ponzi scheme and using money from the fraud to pay for jewelry, luxury automobiles and credit card and tax bills.</p><p>Gene A. O'Neal, 36, of Atlanta entered a not guilty plea at a hearing in federal court in Atlanta, said Patrick Crosby, a spokesman for the U.S. attorney's office.</p><p>Bond was set at $50,000, but O'Neal was expected to post that and be released, Crosby said.</p><p>The criminal indictment follows a civil complaint related to the scheme filed by the Securities and Exchange Commission last October against O'Neal and the firm he ran, Pinnacle Development Partners LLC.</p><p>A federal judge issued a preliminary injunction and appointed a receiver, who has taken charge of the business and assets of Pinnacle Development Partners.</p><p>The indictment, dated Tuesday, said the firm and O'Neal raised about $69 million from some 2,000 investors throughout the U.S. and several foreign countries, ostensibly for the purchase of distressed, foreclosed or bank-owned real estate that would be sold at a promised return of 25 percent within 45 or 60 days.</p><p>Instead, the indictment said, O'Neal used newer investors' contributions to pay back money owed to older investors, racking up huge debts along the way, and didn't tell investors what he was doing.</p><p>If convicted of the 19 counts against him, which include mail and wire fraud, O'Neal faces up to 20 years in prison and a $250,000 fine on each count, Crosby said.</p><p>A lawyer for O'Neal, Michael J. O'Leary, did not immediately return a call Thursday seeking comment.</p><p>The indictment says O'Neal raised the money for his scheme in 15 months using slick advertising that promised hefty returns in a short period.</p><p>The indictment says that beginning in July 2005, Pinnacle, which was founded by O'Neal and headquartered in Atlanta, allegedly began telling investors they could make a 25 percent profit in 45 days, which later became a 25 percent profit in 60 days, upon investment in partnerships Pinnacle formed to acquire property.</p><p>Investors were told that Pinnacle was in the business of purchasing distressed, foreclosed or bank-owned real estate, which Pinnacle intended to flip for a profit after making minor repairs and cosmetic improvements.</p><p>Pinnacle solicited investment by running more than $2.5 million worth of advertising in national and local media publications.</p><p>Prosecutors say that to conceal the fact that Pinnacle was neither selling nor otherwise developing its properties, O'Neal directed that certain of them be transferred between and among Pinnacle partnerships.</p><p>They say that although these were merely paper transactions and did not involve an actual sale, the transfer prices were as much as 10 times the initial acquisition price, thereby fostering the illusion that properties were being developed and sold at significant profits.</p><p>Besides big bucks spent on advertising, the indictment says O'Neal used investor assets to pay more than $2.5 million in salary and commissions and more than $700,000 to furnish Pinnacle's offices. The indictment says investors' money was used to buy a $72,000 Land Rover, a $69,000 Cadillac Escalade, a $117,000 Maserati and $26,000 worth of jewelry, all of which benefited O'Neal directly or indirectly.</p><p>O'Neal also allegedly used investors' money to make $49,000 in personal credit card payments and $365,000 in personal income tax payments.</p>
