Explosives found in Malvern storage facility

Authorities say explosive devices were found in lockers at this Public Storage facility on Lancaster Ave. in Malvern on Thursday, March 7, 2013. (Mari Schaefer / Staff)

Istvan “Steve” Merchenthaler, 42, kept 60 pipe bombs in a self-storage facility.

  • Federal agents and bomb squads denoted the bombs Thursday.
  • Merchenthaler was first arrested in May for allegedly stealing more than $2 million from about 200 investors.

Sixty pipe bombs were discovered in a storage locker in Malvern, Chester County, on Thursday before being safely disposed of and traced to a unit kept by a man charged in a Ponzi scheme, according to a county law enforcement official.

The FBI, which is investigating the incident, would not confirm the amount of devices but acknowledged a large "cache" of explosives had been found at the Public Storage facility on the unit block of Lancaster Avenue in the Malvern section of East Whiteland.

Federal agents and bombs squads from Montgomery County and Philadelphia detonated the devices, which were found in a footlocker-sized container. The 12-inch long bombs were encased in PVC piping and capped at both ends, an official said.

The explosives were taken to Valley Green Park on Route 29, placed in a hole and detonated using other explosives, said East Whiteland Police Chief Eugene Dooley. His department provided support to the operation.

The locker was traced to Istvan Merchenthaler, 42, of Downington, according to the county law enforcement official.

Merchenthaler, however, has not been charged in the pipe bomb incident, and the FBI would not confirm the bomb's were his.

But the timing of the discovery coincided with an announcement by federal authorities earlier in the day, saying that Merchenthaler was being charged with additional crimes related to an alleged Ponzi scheme uncovered last year.

In that alleged scheme, Merchenthaler claimed to be founder of PhoneCard USA, a prepaid phone-card and cellphone distributor, according to the U.S. Attorney’s Office in Philadelphia. He was originally charged last year, but new charges were added Thursday.

He allegedly told investors that he had “lucrative contracts” with Walmart, 7-Eleven, and BJs Wholesale Club, and that they would see a generous return on their investments. He had no such contracts, according to federal officials.

He used investors’ money for personal expenses, to pay family members, and to buy jewelry, firearms, and cars, according to officials.

On Oct. 15, Merchenthaler allegedly stole a 2012 Jeep Grand Cherokee in Maryland and drove it to Pennsylvania, according to the new charges. On Feb. 11, he stole a 2013 Dodge Charger in North Carolina and brought it to Pennsylvania, the indictment said.

Merchenthaler, who is in federal custody, has been charged with two counts of identity theft, four counts of wire fraud, four counts of money laundering, two counts of filing false tax returns, and two counts of interstate transport of stolen property.