HARRISBURG, Pa. (10/20/09)--A Pennsylvania man has been charged with operating a $2 million ponzi scheme that defrauded three credit unions, according to the Pennsylvania attorney general’s office. Eugene D. Miley, 58, is accused of selling fictitious certificates of deposit (CDs) to Moonlight CU, Worthington; VANtage Trust CU, Wilkes-Barre; and Stanwood Area CU, New Stanton. Miley allegedly served as a financial broker for the credit unions, offering to locate and purchase various high interest rate CDs. Miley used the money he received from the credit unions for his personal use. He also generated fake statements about the purchase, interest rates and redemption information for the CDs. “Miley claimed to be helping his clients earn a good return on their investments, but this was simply an illusion,” said Attorney General Tom Corbett in a statement. “As with other ponzi schemes, the money received from new clients was used to pay off older investors, or siphoned off for personal use, until the flow of money stopped--causing the operation to collapse and leaving victims with nothing more than empty promises.” Miley is accused of selling $2.08 million in certificates between 2006 and 2008. He sold $1.3 million to Moonlight CU; $594,000 to VANtage Trust CU; and $99,000 to Stanwood Area CU, according to the attorney general's office. Miley has been taken into custody and will appear for a preliminary hearing Nov. 20. He will be charged with one count of securities fraud for creating a scheme to defraud, a second degree felony punishable by up to 10 years in prison and a $1 million fine; and one count of securities fraud for the sale of unregistered securities, a third-degree felony punishable by up to seven years in prison and a $250,000 fine. Miley also will be charged with three counts each of theft by deception and theft by failure to make required disposition of funds--all third degree felonies, punishable by up to seven years in prison and $15,000 fines. Miley is not licensed to operate as a financial investment company, financial adviser or financial products dealer. The funds for his fraudulent investments were funneled through PNC Bank accounts belonging to him and his business. The transactions were conducted using a PNC Bank branch in Cranberry Township, Pa., Corbett said.