Federal agents have expressed their interest in prosecuting investment fraud.
A Texas federal judge recently ordered a 25-year prison sentence for a defendant involved in an $11 million investment fraud scheme. The judge additionally mandated that the defendant pay $6.5 million in restitution, according to the U.S. Department of Justice.
In 2013, after only six minutes of deliberation, a jury found the 59-year-old man guilty of wire fraud and money laundering because of his involvement with a Ponzi scheme that solicited investments on a national scale. U.S. District Judge Richard Schell sentenced the defendant to two decades per count; however, the judge ultimately allowed the sentences to run partially together for a sum of 25 years behind bars.
According to U.S. Attorney John M. Bales, the man was involved in a plan that created a leaflet for what was said to be a “Lancorp Investment Fund.” As a result, the defendant sold investments in the fund because of false statements to investors.
Federal authorities say that the defendant made false assertions, specifically that the the fund would only invest in highly rated bonds; the principal amount of each outlay would be backed; and that “Lancaster” was experienced in operating this style of investment.
What is a Ponzi scheme?
A Ponzi scheme results when a company or individual guarantees investors a specific rate of profit for an investment. Rather than actually investing the money, the early investors are actually paid with the money from the new investors. The operation turns into one big game of money shuffling that encourages further investments because the early investors believe that they are actually making the promised return on their investment.
One of the most notable cases detailed in the media is the Bernie Madoff matter, wherein many investors lost billions of dollars as a result of a comprehensive Ponzi scheme.
In recent years, federal authorities, including the Department of Justice, the Federal Bureau of Investigation and the Securities and Exchange Commission have focused on investment fraud. In fact, the government has set aside considerable resources for investigating and prosecuting Ponzi schemes and similar offenses.
Those accused of defrauding investors can face both federal and state charges. As in the aforementioned matter, mail fraud, wire fraud and money laundering are often linked to this type of crime.
Defending a Ponzi scheme often requires detailed document sifting and an examination of complex and intricate records that detail complicated transactions. If you are facing charges for an investment-based crime, it is imperative to seek legal counsel experienced in these types of cases.