Ronald J. Sheppard, according to prosecutors, is a white-collar criminal who for nearly three years engaged in fraud and deception that victimized companies and investors.

They say that despite massive losses and continuously unprofitable operations at his company, HomeGold Financial Inc., Sheppard lived an extravagant lifestyle that included average compensation of $1.3 million, a million-dollar motorhome and a $100,000 bill for a personal trainer.

The former HomeGold chief executive officer says, however, he kept alive the hope a broken business could survive and personally guaranteed tens of millions of dollars of bank loans to try to turn the company around.

Further, he says he was denied the chance to tell the state grand jury what he believes.

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Thus, the stage is set for an intense legal battle between Attorney General Henry McMaster and lawyers for Sheppard, who was indicted Wednesday on multiple criminal counts in his alleged role in the financial collapse of Pickens-based Carolina Investors Inc., a wholly owned HomeGold subsidiary.

It will be the next battle of wills between an attorney general who has obtained guilty pleas or successfully prosecuted four former HomeGold and Carolina Investors officers, and a 48-year-old Lexington resident who has been a lighting rod of outrage among Carolina Investors' customers while steadfastly maintaining his innocence.

About 12,000 people, mostly from the Upstate, lost an estimated $278 million when Carolina Investors ran out of money and closed its doors in March 2003. It marked the sad ending to a company founded in 1963 by the late businessman Dwight Holder, who owned and operated a chain of perpetual care cemeteries.

"There was enormous damage done to many investors, people of this state who presumed that people were following the law and treating them appropriately in their investment matters," McMaster said Thursday in announcing Sheppard's indictment in Columbia.

"This is a very serious case. We are treating it very seriously," McMaster told reporters. "I assure you that we are following all leads and all evidence to whomever and wherever it leads us."

Sheppard was indicted by the state grand jury on two counts each of forgery and insurance fraud, as well as one count each of securities fraud, bank fraud, breach of trust, perjury, conspiracy and obtaining a signature or property under false pretenses, McMaster said.

If convicted on all 10 counts, Sheppard could face 57 years in prison and more than $165,500 in fines. He will appear before Circuit Judge Reginald Lloyd in Columbia for a bond hearing Tuesday.

Sheppard's attorney, Jim Griffin of Columbia, said in a statement Sheppard will plead not guilty to all charges and will mount an aggressive defense.

"We are thankful that the proceedings are now outside the control of the attorney general, outside the veil of secrecy of grand jury proceedings and in the courts where Ronnie will get a public trial," Griffin said.

"You can be sure that these jurors will be told the truth about Ronnie Sheppard's 28-month tenure at HomeGold."

Griffin also said Sheppard "was denied the opportunity" to tell the state grand jury about his role at HomeGold.

Griffin didn't elaborate, but Jennifer Evans, chief of the state grand jury, told The Greenville News, "It's up to the grand jurors to decide who they want to hear from. This is the grand jurors' investigation."

According to McMaster and the state grand jury indictment, Sheppard's alleged misconduct began in May 2000 when HomeGold was combined with HomeSense Financial Corp. in a merger of mortgage companies. Sheppard was HomeSense's primary shareholder, the 40-page indictment alleges.

HomeGold, based in Greenville at the time, and HomeSense both wrote and sold mortgage loans to homebuyers with spotty credit histories. The merged companies kept HomeGold's name and its status as a publicly traded company.

After the merger, Sheppard became CEO and a director of HomeGold. He also became a director of Carolina Investors.

HomeGold's business was funded through loans from Carolina Investors, which sold unsecured notes and debentures to the public, according to Securities and Exchange Commission documents.

After Holder founded Carolina Investors, the company financed the sale of cemetery plots through the annual sale of one-year subordinated debentures and notes. Carolina Investors then began other types of lending in South Carolina, including sub-prime loans for mortgages, automobiles and appliances.

In May 1991, Carolina Investors was acquired by National Railway Utilization Corp., which later changed its named to Emergent. That company ultimately became HomeGold.

For HomeGold, as the inter-company debt to Carolina Investors grew, its ability to repay became increasingly less likely, Sheppard's indictment alleges. But it was necessary for Sheppard and other unidentified HomeGold individuals "to keep this fact hidden" from members of the Carolina Investors' board, government regulators and the purchasers of the Carolina Investors' investment products, according to the indictment.

Sheppard and others, who were not named, also marketed loan pools that were manipulated to increase their value to potential investors, the indictment alleges. Sheppard and the others falsified credit scores and manipulated mortgage payments to increase the value of the loan pools, a security under South Carolina law, according to the indictment.

The indictment also alleges Sheppard misrepresented the value of his assets on a business credit application to a bank and submitted false information on a corporate liability insurance policy.

Further, Sheppard committed perjury by giving "false, misleading or incomplete" testimony under oath at a deposition during bankruptcy proceedings, according to the indictment.

But Griffin, Sheppard's attorney, said in his statement he plans to tell jurors in court that Sheppard merged his successful mortgage business with a company whose prior management had raised and spent more than $400 million.

"Obviously HomeGold was broken and in bad need of repair," Griffin said. "These jurors will know that when Sheppard was given the keys to the sinking ship called HomeGold, there was little to no money left and that HomeGold's lenders were pulling the lines of credit in place."

Sheppard tried to right the sinking ship even though he had never run a public company, never raised money through securities offerings and never served on a board of any company, Griffin said.

"We intend to show at trial that Ronnie Sheppard relied upon HomeGold's accountants and lawyers" to make the appropriate filings with the Attorney General's Office and disclosures to investors, Griffin said.

"These accountants and lawyers were paid over a million dollars to do this and they were some of the most prestigious members of their profession," he said.

Griffin said the lawyers and accountants "fully and fairly" disclosed HomeGold's dire financial condition to the attorney general, who also is the state's securities commissioner, and the sale of Carolina Investors securities continued.

Sheppard was president and chief executive officer of HomeGold from May 1, 2000, through Dec. 18, 2002, according to court records. He also was a member of the board of directors from May 1, 2000, through Nov. 19, 2002, court records show.

He was the second former HomeGold official indicted by the state grand jury in the case.

Former HomeGold chief financial officer Karen Miller, after her indictment, pleaded guilty in September to a single conspiracy charge of filing misleading reports with the SEC and withholding key information from Carolina Investors board members.

In addition, two former Carolina Investors officials have pleaded guilty to securities fraud charges and a third was found guilty by a jury.

Former president Larry C. Owen, 62, is serving eight years in prison for 22 counts of securities fraud. His wife, Anne, former senior vice president of investments, pleaded guilty in July to eight counts of securities fraud. She is awaiting sentencing.

In 2004, former Lt. Gov. Earle Morris Jr., who was Carolina Investors chairman, was found guilty of 22 counts of securities fraud. He was sentenced to 44 months in prison, but is out on bond, awaiting his appeal.

None of the indictments might have been possible without a law that took effect in 2003, McMaster said. The bill sponsored by Sen. Larry Martin, R-Pickens, gave the state grand jury the power to investigate securities crimes and pays for investigators who can concentrate on prosecuting securities crimes.

McMaster, meanwhile, said his investigation is continuing and has been aided by cooperation of other defendants in the case, including Miller.

"We have hundreds of thousands of pages of documents that have been produced, some voluntarily, some in response to the state grand jury subpoenas," he said. "It is a lengthy, detailed, white-collar, very serious investigation and we are vigorously working on the case. It's taken a number of months to get to this point."

For the thousands of people, many of whom are elderly and retired, who lost money when Carolina Investors collapsed, "the stories are horrific and tragic of the consequences of that loss," McMaster said. "But that is exactly what happens with the breach of trust that's involved in securities fraud."