© 2011 The Associated Press

March 17, 2011, 5:43PM

http://www.chron.com/disp/story.mpl/ap/tx/7477006.html

RICHMOND, Va. — A Virginia investor who lost $100,000 says he was led to believe his money was safe in the hands of a business run by a Texas man charged with fraud, conspiracy and money laundering.

Philip Kersey of Mechanicsville testified Thursday in federal court in Richmond, where Christian Allmendinger of Houston is on trial.

Prosecutors claim Allmendinger's company, A&O Life Funds, bilked hundreds of investors out of more than $100 million. A&O bought life insurance policies from insured people at less than face value, then collected the benefits when those people died and distributed some of the funds to investors.

According to prosecutors, Allmendinger and his associates illegally portrayed investments as risk-free and misrepresented many aspects of their business.

The trial began Monday and is expected to last into next week.