A couple who formerly operated in Albany have been indicted by a federal grand jury for alleged fraud with losses of more than $4.2 million.

The defendants are Johnny "Mickey" Brown and his wife, Lili Brown.

The federal prosecutor in the case, Lance Caldwell in Portland, said Mickey is scheduled to appear in federal court in Portland to enter a plea on Oct. 3. His wife is due in the same court Oct. 11.

Trial likely will be postponed until the spring.

The Browns remain free. They are believed to live in the Portland area. In about 2002 the Browns launch-ed the "Meet the Need Foundation" in Albany with an office on Queen Avenue. They got members of the Living Water Christian Assembly to let them use their credit cards in an operation that involved the selling of Kirby vacuum cleaners.

The indictment, returned Wednesday, alleges that the Browns, who also operated a Kirby vacuum sales and financing business in Tigard, defrauded U.S. Bank and a group of credit card customers causing losses exceeding $4,200,000.

They are also charged with evading the payment of more than $130,000 in federal taxes. The case was investigated by the Internal Revenue Service/Criminal Investigation Division and the FBI.

The 30-count indictment accuses the Browns of wire fraud, making false statements to a federally insured bank, mail fraud, access device fraud, bank fraud, and tax evasion. For each count, maximum penalties, if convicted, call for a fine and imprisonment for: mail and wire fraud, 20 years; false statements and bank fraud, 30 years; access device fraud, 10 years; and tax evasionm five years.

The indictment alleges that Mickey Brown owes at least $130,871 in taxes to the Internal Revenue Service, that he has a prior bankruptcy in Oregon, and that Lili Brown has a prior conviction for wire fraud and previously filed a bankruptcy action in Washington as president of Granite Distributions.

Also the indictment alleges that because of these legal and financial problems, the Browns opened financial accounts and placed assets, which they controlled, in the names of employees and others.

In addition, the Browns operated a Kirby vacuum sales business and, using the name of one of their employees, entered into a merchant banking arrangement with U.S. Bank which enabled them to accept credit cards from customers for the purchase of vacuum cleaners and related products.

During 2001 through 2003, the Browns are alleged to have recruited over 50 individuals to loan them money by letting them use the individuals' credit cards to finance their business.

The Browns allegedly promised to pay the minimum payment due on the credit card charges, and pay each card holder a dividend of at least 1 percent of the outstanding balance on that card holder's credit card used by the Browns each month. The Browns then used the credit cards and their merchant credit card terminal to charge the credit cards, even though the card holders were not actually purchasing vacuum cleaners or related products.

This use of the merchant credit card process to, in effect, get cash advances, is an alleged breach of the agreement which the Browns had with U.S. Bank. They allegedly misrepresented and concealed their improper use of the merchant account and other facts from the card holders and from U.S. Bank while accumulating approximately $4,200,000 in fraudulent credit card debt.

The indictment further alleges that when the Browns were no longer willing or able to pay the dividends and amounts due on the card accounts, they acted in collusion with the card holders to try and reverse the previous credit card transactions and charge them back to the credit card issuers who would then seek to collect from the Browns, who in fact had no intention or means with which to pay the claims.

According to the indicyment, the Browns cooperated with the card holders in the submission of credit slips wherein the card holders, with the Browns' help, requested a credit and falsely claimed that the Browns failed to deliver merchandise purchased.