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A noncommissioned officer at Davis-Monthan Air Force Base is at the center of claims that more than 100 Tucsonans, many of them church members or military personnel, were financially ruined after investing in shaky real estate deals or near-worthless Iraqi currency.

Those involved say they're now heavily in debt — some for as much as $400,000 — for investment money they borrowed against their homes or credit cards to buy Iraqi dinars or California properties that now face foreclosure.

Often, religion was used to push the investment deals, they said, and some investors, including a Tucson pastor, said they bought in to raise money for church projects to aid the poor. The promised rates of return ranged from about 20 percent to 300 percent, they said.

"They said they could help us, that it was based on faith and trust. They knew the vocabulary to use with Christian people," said Maria Hynum, an East Side grandmother who said she lost $393,000. Two of her relatives also lost tens of thousands of dollars each, she said.

Hynum is a member of Christian Faith Center, 4108 E. North St. She said she's one of nine church members, including the pastor, who invested in a company formerly known as Pacific Wealth Management of Murrieta, Calif., a firm that made its Tucson pitches at some of the city's poshest hotels.

The company, registered in Nevada, is not licensed to sell investments in Arizona and is not connected to a San Diego-based investment firm by the same name.

No criminal charges have been filed against anyone involved. Several agencies are investigating, including the FBI, the Air Force Office of Special Investigations and the Riverside County Attorney's Office in California. At least four lawsuits have been filed by three California law firms.

One attorney says as many as 400 people from across Arizona were victimized, along with hundreds more in California, Arkansas, Puerto Rico, Texas, Oregon and Washington.

Collectively, their losses total hundreds of millions of dollars, and many face bankruptcy, ruined credit ratings and the loss of their homes, said the lawyer, Richard Ackerman of Temecula, Calif., who represents numerous California investors and recently met with dozens of Tucson investors.

Ackerman says Pacific Wealth in Murrieta had no assets of its own and was essentially a "ponzi scheme" that could be kept afloat only as long as more new investors were persuaded to come aboard.

He said investors were fraudulently induced to extract equity from their homes and borrow against lines of credit to buy Iraqi currency or real estate in California, both offered at vastly inflated prices.

For example, he said investors who bought currency were charged about $25,000 each for a million Iraqi dinars, which are worth only about $500.

Tucsonans who took part over the past 18 months say Pacific Wealth agents told clients that if they remortgaged their homes to raise investment cash, the company would cover the differences between their old mortgage payments and their new ones, and also would cover any extra monthly costs for the California properties once renters were found to occupy those premises.

In some cases, Pacific Wealth followed through for a few months, clients said. But when the firm suddenly stopped paying in late 2006, local clients said they were left on the hook for enormous debts. Some of their mortgage payments now top $4,000 a month and the California properties are now in default or foreclosure, they said.

In Tucson, those involved say, nearly all the investors were brought into the Pacific Wealth fold by D-M Tech. Sgt. Ken Fraleigh, a facility manager with the 355th Logistics Readiness Squadron. He has been in the Air Force for nearly 20 years, the past eight at D-M.

Fraleigh, who did not respond to a request for comment left with his wife, was identified in a recently filed lawsuit in California as the main Tucson "referral partner" for Pacific Wealth.

The suit alleges that Fraleigh helped bring in at least 125 Tucson investors, including a dozen D-M airmen and the members of Christian Faith Center, his own church. He also brought in about two dozen more from across Arizona and in six other states, the suit says.

Other California suits allege that frauds were committed on D-M base property, on other U.S. military installations and at a California church.

Church members in Tucson said they don't believe Fraleigh intentionally duped them and said he lost money, too. They think he was taken in by the prosperous image Pacific Wealth portrayed and by the fact Fraleigh's son-in-law, identified in court claims as Maurice McLeod of Murrieta, was president of the company.

Fraleigh greeted potential investors at the door at lavish Tucson investment dinners held at the JW Marriott Starr Pass Resort and other swank locales, investors said.

Under Defense Department rules, service members engaged in after-hours business ventures must obtain their commander's OK. D-M officials said Friday it was not immediately clear if Fraleigh had such approval.

Meanwhile, the situation could jeopardize the security clearances and deployability of the other D-M airmen involved.

Military personnel who incur heavy debt can be deemed security risks, lose their deployable status and be reduced in rank, something that already has happened to several Navy members in California who made the same investments, said their lawyer, Ackerman.

D-M officials said they have identified 11 airmen and three civilian workers on base who dealt with Pacific Wealth, and are offering legal or financial help to anyone affected. The base is cooperating with investigations, said 2nd Lt. Mary Pekas, a D-M spokeswoman.

Several Tucson investors said the Pima County Sheriff's Department and the Arizona Corporation Commission, which regulates investment sales in the state, also are investigating.

Fraleigh is not listed as a defendant in the California lawsuits, but his son-in-law is.

McLeod now is banned by court order from using the business name Pacific Wealth. The long-established investment firm in San Diego with the same name, worried about damage to its reputation, recently sued to stop him.

McLeod did not respond to requests for comment. The Arizona Daily Star was unable to reach anyone being accused of investment fraud to comment for this story, despite numerous phone messages left at the work phones or cell phones of company principals or their lawyers.

Several other California firms are identified in the lawsuits as linked to the McLeod-run Pacific Wealth, along with several California residents. So far, no Tucsonans are known to have filed lawsuits, but several said they plan to sign on to the California actions.

Randy Winkles, a pastor at Christian Faith Center, said he was one of the 40 or so people at the recent meeting with Ackerman in Tucson. Winkles said he lost about $400,000 through remortgaging his home and that his house payment has jumped from $1,300 to $2,500 a month.

Winkles, who sometimes said the opening prayers at the Tucson investment meetings, said he believed godly people were behind the firm, and one of the California principals would talk at length during the meetings about faith and religion, saying that he'd been a pastor's son.

Winkles said he invested to try to raise money for church outreach projects such as a gymnasium for youth, and transitional housing for teenage parents, the homeless and recovering addicts.

"I don't think anyone went into this for self-enrichment. It was done to carry on our vision," said Winkles, who said he heard of the investments from Fraleigh, the D-M technical sergeant, who attends his church.

Noemi Barrios, a Tucson nurse, said she lost about $80,000 and her mortgage payments jumped from $734 to $1,800 a month.

"Some of us feel kind of foolish now for believing, but these are not ignorant people who got involved with this. There's a retired professor, a civic planner, military people, and a lawyer and a doctor," she said.

But with the company's Christian pronouncements, no one thought to check up on the firm's legitimacy, Barrios said. The Arizona Corporation Commission, for example, has a toll-fee number (1-866-VERIFY9) that citizens can call to see if an investment dealer is registered.

Heather Murphy, a spokeswoman for the state agency, said authorities there want to hear from those who feel they were victimized, and they should call the toll-free number.

Meanwhile, as authorities investigate and lawsuits are tested in court, investors such as Hynum say they still believe God will somehow make things right.

"God is going to give us victory in this," she said. "I have to believe that."

Find the online version of this story to download the California lawsuits at www.azstarnet.com/dailystar