A federal grand jury yesterday indicted a 58-year-old Kaua'i man on charges that he operated a Ponzi scheme that allegedly defrauded 140 investors out of $16 million over a four-year period.

David E. Ruskjer is charged with 27 counts of money laundering, 12 counts of mail fraud, five counts of wire fraud, and three counts of currency structuring.

If convicted, Ruskjer would face up to 20 years in prison on each of the mail and wire fraud charges and up to 10 years in prison on the money laundering and currency structuring charges.

Ruskjer, who was not in federal custody yesterday, could not be reached for comment. Michael Green, who is listed in court documents as Ruskjer's attorney, also could not be reached yesterday.

Prosecutors allege that Ruskjer operated investment/loan programs called Ruskjer & Associates and Dave's Investment/Loan Program in Koloa, Kaua'i. Ruskjer presented himself as a successful investor who would use these programs in trading covered and uncovered options with TD Ameritrade, an online securities broker and dealer, U.S. Attorney Ed Kubo said.

From September 2004 to December 2008, about 140 clients invested $16 million with the promise of returns of 3 percent to 5 percent a month, according to the 24-page indictment. Ruskjer claimed that he earned 10 percent on his mother's investments in his programs, the indictment said, but actually lost $57,288 during the first month of operation.

Of the $16 million he collected, Ruskjer sent $8 million to TD Ameritrade to be invested in the stock market, the indictment said.

Ruskjer allegedly paid earlier clients with money collected from later investors "since there was never sufficient money to support the 3 to 5 percent interest rates he guaranteed his clients," Kubo said.

Ruskjer never delivered on the promised rates of return, Kubo said, and lost more than $2.5 million. Ruskjer, however, did spend "significant sums of client money enriching himself," Kubo said.

Ruskjer used $528,458 of investors' money to buy a condominium on Kaua'i, the indictment said, and spent $29,000 for a Honda sedan and another $10,000 for two motorcycles.

Over the four-year period, Ruskjer allegedly withdrew more than $100,000 from automated teller machines and made about $740,000 in debit and credit card purchases from his First Hawaiian Bank accounts.

He also transferred $88,000 from his Ameritrade account to overseas bank accounts and withdrew $1.6 million and returned about $1.4 million to his FHB accounts, the indictment said.

Yesterday's indictment was the second time in a month that Ruskjer has faced legal action relating to his alleged multimillion-dollar investment scam.

The Securities and Exchange Commission on May 27 filed a lawsuit in U.S. District Court against Ruskjer, accusing him of misappropriating millions of dollars from investors nationwide. The lawsuit contains accusations that are similar to the ones in yesterday's indictment.

The criminal case is being prosecuted by assistant U.S. attorney Leslie Osborne.