Strategic Federal And State Criminal Defense

Trial of California man results in Ponzi scheme conviction

On Behalf of | May 18, 2018 | Federal Crimes |

A 69-year-old man residing in Roseville received a guilty verdict from a jury after a weeklong trial in federal court in San Francisco. He had been accused of misleading Japanese investors in a classic Ponzi scheme that paid early investors with cash supplied by new investors. Damages to investors totaled $6.8 million. The jury convicted him of conspiracy to launder money, money laundering, conspiracy to commit wire fraud and 17 counts of wire fraud. He now awaits his sentence.

Evidence presented at trial showed that the man and his 73-year-old accomplice defrauded investors between 2012 and 2015. They told their Japanese victims that the money would be invested in a business identified as Money Management Strategies. This entity was styled as a high-speed trading business that produced returns in excess of 100 percent.

In reality, the men used the funds to repay the original investors, pay debts and invest in gold or other investments. By 2014, Japanese regulators launched an investigation of two Japanese people who had direct contact with the Ponzi scheme operator because of the losses suffered by other Japanese investors. Authorities cleared the two Japanese contacts of wrongdoing, but they came to the United States and reported the Ponzi scheme to the FBI. They served as witnesses for the prosecution at the trial.

Financial crimes, such as fraud, forgery or computer fraud, generally qualify as federal crimes. A person charged by federal investigators could face a lengthy prison sentence. The representation of an attorney could inform the accused individual about the potential penalties and likelihood of winning a trial. In some situations, a lawyer might recommend pursuing a plea deal, which creates the possibility of negotiating a lighter sentence.

Source: Campbell Patch, “Former Campbell Man Convicted In $6.8 Million Ponzi Scheme“, May 9, 2018

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