A former Maui resident pleaded guilty Wednesday in Portland, Ore., as a conspirator in an investment fraud scam that took in more than $125 million, the Internal Revenue Service said.

Rita L. Regale, 53, also known as Rita L. Brunges, faces a maximum sentence of 10 years in prison, a fine of $250,000 and a three-year term of supervised release for conspiring to commit money laundering, the IRS said. Regale served as the chief financial officer and director of First International Bank of Grenada between October 1997 and April 2000.

Regale's plea agreement calls for her to cooperate against other defendants in exchange for a sentencing recommendation in the range of 51 to 71 months. Her sentencing has been postponed pending trial of two remaining co-defendants — Douglas C. Ferguson and Laurent E. Barnabe, aka Larry Barnabe — in February 2007.

Gilbert A. Ziegler, founding chairman and CEO of First International Bank of Grenada, was indicted in January 2004 for fraud and money laundering related to the bank scam. Ziegler died of a heart attack in December 2005.

Ziegler and others, including Regale, persuaded people to deposit money by promising annual returns of up to 300 percent, according to the indictment.

Ziegler, who fled to Uganda and was arrested with Ferguson following a shootout, and Regale were the only figures in the case with ties to Hawai'i.

U.S. Assistant Attorney Claire Fay of Oregon told The Advertiser yesterday that many people were bilked by the promises of high returns and 100 percent guarantee against loss by the International Depositors' Reinsurance Corp., including "a lot of folks from Hawai'i who were investors." IDRC was established as a name-only insurer in December 1996 by Ziegler and Ferguson.

It was a common pyramid scam.

The bank, in fact, had no investment income and used new depositors' money to make purported interest payments to earlier investors, according to court documents. First International Bank of Grenada was taken over by the government of Grenada in August 2000 and the group went into liquidation in January 2001.

Ziegler came to Hawai'i from Oregon around 1994 and started a business, Wheatland Interests, which sold tax avoidance "pure trust organizations," according to court documents.

In August 1996, he purchased the paperwork of an offshore bank called Fidelity International Bank for $50,000 and created a Class I offshore bank in Grenada, West Indies, called First International Bank of Grenada, in October 1997, according to court documents.

Regale, a former real estate agent, health food store manager and fitness center co-owner, was hired in June 1997 as operations and accounts manager of Fidelity International Bank, which depended on management services of other banks and entities to operate. The bank was supposedly based on the Caribbean island of Nevis but was actually operated out of Kihei, Maui, by Ziegler and Regale, according to IRS and FBI investigators.

Fay said Ziegler and Regale used "independent contractors" to sell certificates of deposits in Hawai'i and paid them a commission.

"The First International Bank of Grenada is one of the crudest-ever examples of financial crime," said David Marchant, publisher of the Miami-based "Off-Shore Alert," which exposed the scam.

Marchant said Ziegler, with no banking experience, no money and a passport issued by a nonexistent country, "Melchizedek," was able to capitalize a bank using a photograph of a 10,000-carat ruby the bank did not own or possess, and take in more than $100 million in deposits.

Like many white-collar crooks, Ziegler specialized in "ripping off the elderly and the religious" and appeared to have "no conscience about doing so," Marchant said.

Reach Rod Ohira at rohira@honoluluadvertiser.com.