William Gourley, 62, and Barbara Gourley, 52, of Canaan each were indicted earlier this month by the Penobscot County grand jury on charges of securities fraud, sale of unregistered securities and four counts of theft by deception for illegally selling about $4.4 million worth of promissory notes through their real estate development business. The couple operated the firm for 11 years.

Each faces a maximum of 10 years in prison on the Class B theft charges, and a maximum of five years on the Class C securities charges, according the Maine Attorney General's Office, which is prosecuting the case. They also could be ordered to pay restitution. They were released on personal recognizance bail. A trial date has not been set.

As the Gourleys walked from the gallery in the courtroom into the well to enter their pleas before Superior Court Justice Kirk Studstrup, an unidentified man angrily shouted at them. "You could look me in the eye when you stole $34,000 from me," he said.

The Gourleys did not react, but a bailiff told the man to calm down or he would be removed from the courtroom. The man left as soon as the Gourleys had entered the pleas, but before the proceeding concluded. He could not be found in the vicinity of the courthouse during the recess.

The Gourleys allegedly failed to register the promissory notes as securities, misrepresented the profitability of the enterprise and the risk involved in the investments, and failed to disclose that the notes all were secured by property worth less than $200,000, the Attorney General's Office stated early this year. The couple reportedly promised rates of return on the notes of between 12 and 20 percent.

The only way the Gourleys could meet that promise was to use the money invested by new investors to pay interest to previous investors, a classic Ponzi, or pyramid, scheme, Maine Attorney General Steven Rowe has said.

In a civil proceeding in April, the couple was ordered to repay the money by paying a portion of their income to the state securities administrator for distribution to victims until the entire amount has been repaid. The couple also is prohibited from further sales of securities.

The payments would cease upon the death of both Gourleys, though victims still owed money could seek restitution from the couple's estates. The Gourleys' bankruptcy filing is pending in U.S. Bankruptcy Court in Bangor.

Last month, they entered into a consent agreement, signed by U.S. Bankruptcy Judge Louis H. Kornreich, to repay a Millinocket and a Dexter couple a total of $225,000 in restitution as part of the bankruptcy proceeding.
"This content originally appeared as a copyrighted article in the Monday, July 25, 2005 edition of the Bangor Daily NEWS and is used here with permission."