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Bilked investors, including members of a Kelowna church, will get a little more than a third of the money they put into a bogus venture that scammed them out of $1.3-million.

Under a deal brokered by the B.C. Securities Commission, two principals in the fraud have agreed to pay $500,000 in restitution to investors, most of them members of the Christian evangelical New Life Church.

John DeVries, Ernest Reed Grafke, Ralph Bromley and Wesley Campbell admitted they got residents to invest in Amber Enterprises without being registered and without filing a prospectus, the commission said in a release yesterday.

The company was set up by Mr. DeVries, a resident of the Turks and Caicos Islands, so people could invest in California-based IPIC Investments, supposedly an import-export business.

An investigation by U.S. regulators found it was in fact a Ponzi scheme -- a scam where current investors are kept on board with payments of money raised from new investors.

Between November of 2002 and May of 2003, Amber raised about $5.8-million from B.C. investors, commission spokesman Andrew Poon said in an interview.

"Some investors did withdraw their principal and their profit early on, so they didn't lose any money," he said. "However, some investors decided to reinvest the profits they made.

"These reinvestments were co-mingled with the worldwide Amber investments and used as the payout in the Ponzi scheme and lost when IPIC collapsed."

No one from New Life Church was immediately available to comment on the settlement.

One unnamed investor said last year that some people put second mortgages on their homes and others lost everything in the scheme.

The scheme was successful in part because of the church connections and because it played on investors' desire to make money and do good work.

The scheme collapsed in 2003 after Mr. Setser and IPIC were indicted by the U.S. Securities and Exchange Commission, which alleged Mr. Setser scammed $160-million (U.S.) from investors associated with Christian congregations.

Mr. Setser and others were convicted last June of 22 counts of fraud and conspiracy and he faces life in prison.

The B.C. commission said Mr. DeVries and Mr. Grafke have agreed to make $500,000 restitution, while Mr. Bromley has agreed to pay $9,000.

Mr. DeVries has also been banned from activity in B.C. capital markets for 17 years and Mr. Grafke for 15 years.

Mr. Bromley has been handed a five-year ban and Mr. Campbell a two-year ban.

CORRECTION

In Jan. 31 editions, Canadian Press reported a settlement between the B.C. Securities Commission and four individuals, includ ing John DeVries and Ernest Reed Grafke. The two were associated with Amber Enterprises, a company that invested in California-based IPIC Investments, which -- after producing early returns -- was found to be a Ponzi scheme that defrauded investors.

The story should have emphasized that the commission made no finding that Mr. Grafke and Mr. DeVries knew of the IPIC scheme. The se ttlement agreement said that Mr. DeVries and his family lost $1.1-million when IPIC collapsed and that Mr. DeVries and members of hi s family chose not to seek reimbursement. The settlement agreement also said Mr. DeVries and the IPIC receiver jointly established a trust to compensate the Amber victims and that Mr. DeVries contributed $430,000 (U.S). It also said Mr. DeVries and Mr. Grafke agre ed to pay $500,000 for the purposes of restitution and in respect of settlement.