YORK -- The wife of a York man arrested this week on charges he swindled investors out of millions through an international Ponzi scheme said Friday she's in shock over her husband's charges and that she feels scammed, too.
Christine Reed, 36, said she knew nothing of her husband's alleged activities until federal authorities arrested him at home Tuesday morning. David Reed, 38, is accused of bilking $13 million from investors in his online bank.
"Pretty much, I was scammed along with everybody else," said Reed, a mother of three who was named as a co-conspirator in the indictment but has not been indicted. She says FBI investigators have told her she's in the clear.
Janice Oh, spokeswoman for the U.S. attorney's office in New York, which is prosecuting the case, declined to comment Friday on that assertion. Efforts to reach the FBI on Friday were not successful.
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Reed said authorities came to her home Tuesday morning without warning and took her husband into custody.
"I was like, 'OK, what?' It really just happened so fast. ... Handcuff, see you later," she told The Herald on Friday. "They just said they were taking him in, and they'd be in contact with me.
"I was just kind of looking at him like, 'What's going on?'"
She said her husband said nothing as he was taken away.
"I'm just as in shock as everybody else," Reed said.
Investigators say David Reed founded the online bank OSGold in March 2001. It was backed in part by gold bullion reserves stored in an off-shore vault. Customers would open accounts by wiring money to bank accounts controlled by Reed and others and track their balances through the bank's Web site.
The bank operated legitimately at first, investigators said. By May 2001, Reed was offering customers 45 percent returns on their investments if they didn't touch them for 12 months, investigators said. He told investors the money was being traded on foreign exchange markets, but investigators claim he was using the money for personal expenses.
The bank had around 66,000 accounts and investigators say around $12.8 million has not been returned to customers and investors. No gold bullion reserves associated with the company have ever been found.
If convicted on charges of conspiracy to commit money laundering and wire fraud, David Reed could face 40 years in prison.
Family members say the Reeds were living in North Carolina when they moved to Cancun, Mexico, in 2002 after David Reed started a nightclub there. He moved first and brought his wife and their children down several months later.
Four years ago, Christine Reed and the children moved to York, where her mother and brother live, and her husband stayed in Mexico. David Reed moved to York a few months later, and the family has lived there since.
In the 27-page indictment, Christine Reed is accused of stashing money in duffle bags and fleeing to Mexico with her husband.
She denies that.
"I had no dealings with stashing any money in any duffle bags," she said. "I never took any money to Mexico."
Some family members say the move out of the country seemed odd.
"It was kind of a concern to us that my sister was going down to live in Mexico," said Bob Newhouse, Christine Reed's brother. "It just never seemed right."
Inge Hilderbrand, Christine Reed's mother, said she also thought it strange at first that David Reed would want to take his family to Mexico.
"He was supposed to have a really good business," Hilderbrand said. "Why would he go to Mexico?"
But when everyone -- including David -- returned home after a few years, she felt differently. "Any feelings I had went away."
Hilderbrand said she has no doubt her daughter did nothing wrong.
"My daughter knew nothing of it," she said.
For Christine Reed, the priority now is protecting her children -- ages 4, 9 and 14 -- from the fallout of her husband's arrest.
"They're confused; they're just missing their dad," she said. "They don't understand; I don't understand, so I really don't know what to tell them."
Faith and family will help her deal with the circumstances, she said.
"My whole world has gone completely upside down at this point; I'm really just trying to cope."