$100m Ponzi scheme mastermind flees US prison

The hunt is on after a US man serving 18 years in prison for orchestrating a $100m (£74.7m) Ponzi scheme reportedly escaped from a minimum-security work camp Wednesday (6 December).

Frederick Darren Berg, 55, of Mercer Island, was discovered missing at around 3:30pm from a 130-inmate facility situated next a maximum-security US Penitentiary in Atwater, California, according to the Seattle Times, citing a spokesperson from the US Marshals Service.

An investigation remains ongoing, officials said, adding Berg is now deemed a fugitive after leaving the camp.

The US Attorney's Office in Seattle – responsible for prosecuting the former multi-millionaire in 2012 – told the Seattle Times the culprit would be found.

Spokesperson Emily Langlie said: "More than 800 victims suffered losses from Berg's schemes – losing dreams of retirement, home ownership or educational opportunities for children and grandchildren.

"Darren Berg will be captured, held to account and returned to federal custody," Langlie added.

According to the Merced Sun-Star, he is the third inmate from Atwater to escape this year.

Other men included Eric Pree, who walked away from a minimum-security camp before going on the run, and Guaymar Cabrera-Hernandez, who was captured 24 hours after fleeing.

Five years ago, Berg was sentenced for wire fraud, money laundering and bankruptcy fraud. Authorities said at the time his was the "largest Ponzi scheme in Western Washington."

An FBI filing 9 February 2012 detailed how he founded the Meridian Group, a front organisation for elaborate fraud. Between 2001 and 2009, prosecutors said he used more than $100m taken from more than 800 investors for his own expenses and to maintain his scheming.

Between 2003 and 2010, Berg used approximately $45m of his investors' funds to purchase transportation companies. He also used stolen money to buy waterfront houses and spent millions of dollars on the purchase and operation of two Lear jets and several personal yachts.

Berg was arrested in Los Angeles on 21 October 2010 and was indicted a month later, in November 2010. He pleaded guilty in August 2011, the filing shows. At sentencing, US district judge Richard A. Jones told him he had "reckless disregard for his victims" and "no moral compass."

Prosecutors said hundreds of victims were hit with significant losses, with many facing bankruptcy.