Examples of Money Laundering Investigations - Fiscal Year 2015
The following examples of Money Laundering Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.
California Woman Sentenced for Role in Offshore Sweepstakes Scheme
On Aug. 11, 2015, in Asheville, North Carolina, Patricia Diane Clark, of Sacramento, California, was sentenced to 130 months in prison and ordered to pay $642,032 in restitution and to forfeit the same amount jointly with her co-defendants. Clark pleaded guilty to conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering. According to court documents, from about 2007 through February 2013, Clark and her co-conspirators called U.S. residents from Costa Rican call centers, falsely informing them that they had won a cash “sweepstakes.” The victims, many of whom were elderly, were told that in order to receive the prize, they had to send money for a purported “refundable insurance fee.” Clark picked up money from the victims and sent it to her co-conspirators in Costa Rica. Clark also managed others who picked up money from the victims in the US and she kept a portion of the victims’ payments. Once the victims sent money, Clark’s co-conspirators contacted the individuals again and falsely informed them that the prize amount had increased, either because of a clerical error or because another prize winner was disqualified. The victims then had to send more money to pay for “new” fees to receive the larger sweepstakes prize. The attempts to collect additional money from the victims continued until an individual either ran out of money or discovered the fraudulent nature of the scheme. Clark, along with her co-conspirators, was responsible for approximately $640,000 in losses to more than a hundred U.S. citizens.
Businessman Sentenced for Conspiracy to Misbrand a Product for Human Consumption, Money Laundering
On Aug. 5, 2015, in Providence, Rhode Island, Tayfun Karauzum, of Newport Beach, California, was sentenced to 60 months in prison and three years of supervised release. On Jan. 30, 2015, Karauzum pleaded guilty to conspiracy to misbrand a product for human consumption and money laundering. According to court documents, Karauzum manufactured, marketed and distributed for human consumption Potion 9, a product containing butanediol, an industrial solvent that rapidly metabolizes into gammahydroxybutyric acid (GHB) – commonly referred to as a “club drug” or “date rape drug.” Karauzum was the owner of Max American Distribution LLC in Newport Beach, California, through which he marketed and distributed between $1 million and $2.5 million dollars’ worth of Potion 9 through online sales and dietary supplement companies. Karauzum caused nearly 13.5 million milliliters of the misbranded product Potion 9 to be manufactured and available for distribution. Karauzum routinely transferred proceeds from the sale of Potion 9 sales in increments in excess of $10,000 from his business’ PayPal account into a personal bank account.
Former Pharmacy Operator Sentenced for Structuring Bank Deposits
On Aug. 3, 2015 in Huntington, West Virginia, Kofi Ohene Agyekum, former owner and operator of A+ Care Pharmacy in Barboursville, West Virginia, was sentenced to 64 months in prison. Agyekum also agreed to forfeit to the United States more than $2.3 million plus a Lexus. Agyekum pleaded guilty in May 2015 and admitted to avoiding the federal reporting requirement by making deposits in an amount less than $10,000 and making the deposits in multiple bank accounts in various area banks. Federal banking laws aimed at identifying criminal activity require financial institutions to report cash transactions of more than $10,000 to federal authorities. Structuring, or dividing cash transactions into amounts less than $10,000, is a common technique used by criminals to avoid triggering the reporting requirements and the detection of the underlying crimes. It was found that the funds Agyekum structured were derived from the illegal distribution of oxycodone from A+ Care Pharmacy.
North Carolina Man Sentenced for Theft of Government Funds
On July 29, 2015, in Greensboro, North Carolina, Juan Francisco Martinez, of Concord, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $2,999,905 in restitution to the IRS. According to court documents, from April 2010 through September 2012, U.S. Treasury refund checks bearing out-of-state payee addresses were negotiated through Martinez’s business bank accounts. The vast majority of these refund checks were fraudulently obtained through the submission of false tax returns and the legitimate refund checks processed through the accounts had been stolen. These refund checks often contained payee addresses from New York, New Jersey, Pennsylvania, and other locations outside North Carolina.
Former Ringleader of Albuquerque-Based Drug Trafficking Organization Sentenced
On July 28, 2015, in Albuquerque, New Mexico, Christopher Roybal, the former leader of an Albuquerque-based drug trafficking organization, was sentenced to 168 months in prison, five years of supervised release and required to pay a $184,080 money judgment. On Feb. 25, 2015, Roybal pleaded guilty to five counts of a second superseding indictment, charging him with participating in a cocaine trafficking conspiracy, three money laundering conspiracies, and a substantive money laundering offense. In entering his guilty plea, Christopher Roybal admitted that between Aug. 2011 and Dec. 2012, he conspired with others to distribute kilogram quantities of cocaine in Albuquerque and Las Vegas, N.M. He also admitted participating in three conspiracies that laundered the proceeds of his drug trafficking organization. One conspiracy involved the transportation of drug proceeds from Albuquerque to California to pay for marijuana that was distributed by Christopher Roybal’s organization. The second and third conspiracies involved the laundering of Christopher Roybal’s drug proceeds through accounts at a bank and a credit union. As part of his plea agreement, Roybal agreed to forfeit his Albuquerque residence and a 1967 Chevrolet Camaro. The charges filed in the case were the result of a 16-month multi-agency investigation into a drug trafficking organization headed by Roybal. Roybal was one of the 19 defendants charged in Dec. 2012, with drug trafficking and money laundering charges in a 60-count indictment. The indictment was superseded twice; first in Feb. 2014, to add a 20th defendant and a witness tampering charge, and again in Sept. 2014, to add another witness tampering charge and a heroin trafficking charge.
Ohio Man Sentenced for Over $1.1 Million Unemployment Fraud
On July 27, 2015, in Cleveland, Ohio, Juan Sanders was sentenced to 139 months in prison. He previously pleaded guilty to conspiracy to commit mail and wire fraud, wire fraud, aggravated identity theft and money laundering. According to court documents, from about September 2011 to January 2014, Sanders and others conspired to defraud state unemployment offices in Ohio, California, North Carolina, Massachusetts and Illinois. Sanders fraudulently obtained personal identifying information from unsuspecting individuals to submit fraudulent claims for unemployment insurance benefits. Sanders also created state unemployment insurance accounts for multiple fictitious employers and then filed claims from “employees” who had been purportedly laid off by the fictitious companies. Sanders caused benefit debit cards for the “employees” of these fictitious companies to be mailed to various addresses in Ohio. Once the benefits were loaded or reloaded onto the debit cards, Sanders and his co-conspirators used the debit cards at various ATMs in Ohio to withdraw the fraudulently obtained money. As a result of this scheme, approximately $1,174,767 in fraudulent unemployment benefits were paid from state agencies in North Carolina ($572,170), Ohio ($261,509), Illinois ($144,240), California ($129,600) and Massachusetts ($67,248).
Former New York Stockbroker Sentenced for Financial Fraud Schemes
On June 25, 2015, in Central Islip, New York, Mark Hotton, a former Long Island stockbroker, was sentenced to 135 months in prison, three years of supervised release and ordered to pay $5,750,000 in restitution. On July 30, 2013, Hotton pleaded guilty to conspiring to launder the illicit proceeds of almost two decades of fraud. According to court documents, between January 1995 and October 2012, Hotton used funds he obtained from a series of securities fraud schemes, mail fraud schemes and other crimes to promote his continuing illegal conduct. Throughout the conspiracy, Hotton also laundered proceeds of his frauds to pay employees cash wages, thereby avoiding federal withholding taxes intended for Social Security, Medicare and Medicaid. Hotton also laundered funds to avoid required payments to union pension and benefit funds. Additionally, Hotton pleaded guilty to additional fraudulent conduct arising from the financing of the proposed Broadway play “Rebecca.”
California Woman Sentenced in Connection with Bank Fraud
On July 24, 2015, in Helena, Montana, Erika Rae Brown, of San Diego, California, was sentenced to 56 months in prison, three years of supervised release and ordered to pay approximately $3.7 million in restitution which represents money Brown owes to a bank and the United States Department of Agriculture (USDA). On March 19, 2015, Brown pleaded guilty to money laundering in connection with a bank fraud scheme. According to court records, Brown obtained a four-million dollar bank loan based on a series of fraudulent representations about a data storage facility project she claimed she was working on. In January 2009, the bank forwarded the data company’s loan application to the USDA. Following representations by one of Brown’s associates regarding the project, the USDA committed to guarantee the loan. As part of the parameters for the loan, the bank required proof that companies were interested in using the data storage facility. Brown submitted false letters to the bank from several well-known national companies that purportedly wanted to use the data storage in addition to a number of cashier’s checks and invoices in an effort to show that the company was in fact spending capital on the project. In reality, no national companies were interested and the checks were altered version of checks Brown had written for other expenses. A financial analysis of the loan proceeds revealed that Brown used the money for personal expenses, including $128,135 in rent for a Laguna Beach house and $5,825 for two Rolex watches. The bank foreclosed on the property in August 2013.
Former Bank Branch Manager Sentenced for Cashing Fraudulently Obtained Tax Refund Checks
On July 22, 2015, in Manhattan, New York, Edwin Mejia was sentenced to 44 months in prison, three years of supervised release and ordered to pay $442,642 in forfeiture and $442,642 in restitution. In December 2014, Mejia pleaded guilty to theft of public funds and aggravated identity theft in connection with his participation in a scheme to cash more than $400,000 in fraudulently obtained federal tax refund checks issued in other people’s names. According to court documents, Mejia worked at branches of a bank in Yonkers and Manhattan. Mejia initially was a banker and later became the branch manager of multiple branches of the bank. From 2010 through 2013, Mejia participated in a scheme to fraudulently obtain and cash tax refund checks issued by the United States Treasury. The fraudulent refund checks were generated by the filing of false and fraudulent tax returns in the names of other people. As part of this scheme, Mejia helped facilitate the cashing of the fraudulent refund checks. Mejia cashed the fraudulent checks himself or by paying a co-conspirator to do so.
Two Colombian Citizens Sentenced for International Money Laundering Conspiracy
On July 20, 2015, in Miami, Florida, Leonardo Forero Ramirez and Ubaner Alberto Acevedo Espinosa were sentenced to 37 months and 18 months in prison, respectively, and ordered to serve one year of supervised release. Both defendants previously pleaded guilty to conspiracy to commit money laundering. According to court documents, both Acevedo and Forero were Colombian citizens residing in Bogota. During 2008 and 2009, Acevedo handled customer accounts at a stock brokerage firm that offered accounts that could be used by customers to receive deposits, wire transfers, and other credit or money, and to disburse the funds through wire transfers and cash or other withdrawals. The stock brokerage firm was authorized to receive funds in U.S. dollars, provided that they were properly documented and justified as being for legitimate business transactions. Forero was one of Acevedo's customers. During the course of his participation in this scheme, Forero received approximately $1.2 million from IRS undercover accounts that he passed on to the people designated to receive it. Acevedo was involved in the transfer of approximately $335,000 from IRS undercover accounts in the United States to the stock brokerage firm in Colombia, and the conversion of the dollars into pesos and the subsequent withdrawal of the monies by Forero. Both Acevedo and Forero knew that the money was derived from criminal activity.
Financial Advisor Sentenced for Stealing Over $1.1 Million from His Clients
On July 15, 2015, in Norfolk, Virginia, Joshua Ray Abernathy, of Chesapeake, was sentenced to 90 months in prison, three years of supervised release and ordered to pay $1,181,755 in restitution to his victims and to forfeit all of the proceeds from his offense. Abernathy pleaded guilty on March 13, 2015 to mail fraud and unlawful money transactions. According to court documents, Abernathy, a licensed broker and financial advisory, engaged in a six-year Ponzi scheme. Abernathy convinced his clients to transfer funds from legitimate IRA accounts to his company “Omega Investment Group.” Abernathy claimed that he could invest the funds in “puts” and “calls” and reap fantastic returns. In reality, Abernathy invested only a tiny portion of the money in his personal E*Trade account and used the majority of the monies to fund his extravagant lifestyle including paying for living expenses, home furnishings, restaurants, sporting goods, electronics, clothing and entertainment. Abernathy also spent substantial investor funds for personal travel and vacations as well as using client monies to rent luxury automobiles. After spending all of the client funds and with investors asking questions, Abernathy walked in to the FBI and confessed to running the Ponzi scheme.
Michigan Doctor Sentenced for Providing Medically Unnecessary Chemotherapy to Patients
On July 10, 2015, in Detroit, Michigan, Farid Fata, M.D., of Oakland Township, was sentenced to 540 months in prison and ordered to forfeit $17.6 million. Fata, a Detroit area hematologist-oncologist, pleaded guilty in September 2014 to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. According to court documents, Fata was a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), which had various locations in Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan. Fata prescribed and administered unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to 553 individual patients in order to increase his billings to Medicare and other insurance companies. Fata then submitted approximately $34 million in fraudulent claims to Medicare and other insurers for these unnecessary treatments. Furthermore, Fata used the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive positron emission tomography (PET) scans for which he billed a private insurer.
Pennsylvania Man Sentenced for Violating Federal Drug, Gun and Money Laundering Laws
On July 7, 2015, in Pittsburgh, Pennsylvania, Omali P. McKay, a citizen of Trinidad who formerly resided in Lower Burrell and in Arnold, was sentenced to 180 months in prison, five years of supervised release and ordered to forfeit vehicles, a residence and $272,000 in cash. McKay was previously convicted of violating federal narcotics, firearms and money laundering laws. According to court documents, McKay conspired with others from 2006 to Aug. 25, 2012, to distribute five to 15 kilograms of cocaine and 280 to 840 grams of crack cocaine. Also, McKay admitted possessing with intent to distribute one kilogram of cocaine seized from his Lower Burrell residence on Aug. 25, 2012, while simultaneously possessing an assault rifle in furtherance of the drug crime. Finally, McKay admitted to conspiring with three others to launder his drug trafficking proceeds. He used those laundered funds to purchase the Lower Burrell residence for $243,000 in cash in August 2011.
New York Man Sentenced for Money Laundering Conspiracy
On July 3, 2015, in Albany, New York, Michael Elcox, of Ghent, was sentenced to 37 months in prison and three years of supervised release. Elcox pleaded guilty in March 2015 for his role in a conspiracy to launder the proceeds of an illegal marijuana distribution network. The conspiracy involved routing illegal proceeds through various bank accounts and moving cash from New York to Florida. Federal agents seized more than $300,000 in cash, representing the proceeds of Elcox’s illegal marijuana distribution, from locations in New York and Florida.
Minnesota Man Sentenced for Defrauding Investors
On June 26, 2015, in Minneapolis, Minnesota, Sean Meadows, of Eden Prairie, was sentenced to 300 months in prison and three years of supervised release for using his financial planning and asset management firm, Meadows Financial Group (MFG), to operate a long-term Ponzi scheme. Meadows pleaded guilty on Dec. 11, 2014 to wire fraud, mail fraud, and transaction involving fraud proceeds. According to the plea and documents filed in court, Meadows operated MFG, through which he sold insurance and investment products to clients in Minnesota, Indiana, Arizona, and elsewhere. From 2007 until April 2014, Meadows successfully solicited a total of at least $13 million from more than 100 clients for a purported investment managed by MFG. The defendant falsely told victims that he would use their funds to purchase bonds, real estate, or other legitimate third-party investments. Meadows lured victims into removing funds from their retirement and other savings accounts by promising high rates of returns – up to 10 percent annually – when, in fact, he did not invest their funds and did not have a legitimate means by which to make interest payments. Instead, Meadows used funds from new investors to make interest and/or principal repayments to existing investors and to pay personal expenses. Among the victims Meadows defrauded are senior citizens and the disabled, poor or terminally ill. Victims were left in financial ruin because they lost their financial security, retirement funds, their ability to support their families, and in some cases, their ability to pay for cancer treatments.
Former Senior Executive of Qualcomm Sentenced for Insider Trading and Money Laundering
On June 26, 2015, in San Diego, California, Jing Wang, of Del Mar, California, was sentenced to 18 months in prison and fined $500,000 for his role in a three-year insider trading scheme. Wang, former Executive Vice President and President of Global Business Operations for Qualcomm Inc., pleaded guilty in July 2014 to insider trading, money laundering and obstruction of justice. In connection with his plea, Wang made three, separate insider trades using a brokerage account in the name of his British Virgin Island (BVI) shell company, Unicorn Global Enterprises. First, in early 2010, prior to Qualcomm’s announcement of a dividend increase and stock repurchase, Wang bought company stock valued at approximately $277,000. Then in December 2010, while attending Qualcomm’s Board of Directors meeting in Hong Kong, and hours after the Board approved a non-public offer to purchase Atheros, Wang purchased stock in Atheros. A few weeks later, he directed his stockbroker, Gary Yin, to sell the Atheros stock, for approximately $481,000, and purchase Qualcomm stock one day before the company announced record earnings. Wang transferred the illegal proceeds from Unicorn’s account to an account of a new BVI shell company he controlled. He obstructed justice by creating a false cover story in which he and Yin would blame Wang’s brother Bing Wang, who resides in rural China, for the insider trading and ownership of the Unicorn Account. Yin pleaded guilty to conspiring to obstruct justice and launder money, and is scheduled to be sentenced at a later date. Bing Wang has been charged in connection with the scheme, and is wanted on an international arrest warrant.
North Carolina Land Developer Sentenced in $23 Million Bank Loan Scheme
On June 25, 2015, in Asheville, North Carolina, Keith Vinson, of Arden, was sentenced to 216 months in prison for his role in a scheme involving the failed land development deal of Seven Falls, a golf course and luxury residential community in Henderson County, North Carolina. Vinson was also ordered to serve three years of supervised release and to pay $18,384,584 in restitution in the amount of. A federal jury convicted Vinson in October 2013 of conspiracy, bank fraud, wire fraud, and money laundering conspiracy. According to court documents, beginning in 2008, Vinson and his co-defendants conspired and obtained money from several banks through a series of straw borrower transactions in order to funnel monies to Vinson and his failing development of Seven Falls. In order to advance this scheme Vinson and his co-conspirators, including Avery Ted “Buck” Cashion III, Raymond M. “Ray” Chapman, and others, recruited local bank officials including George Gordon “Buddy” Greenwood and Ted Durham, who at the time were presidents of two different banks. When bank officials realized that they had reached their legal lending limits with respect to some of the straw borrowers, additional straw borrowers were recruited to the scheme and more straw borrower loans were made to them. Additional straw borrower loans were also necessary to keep loans current, a scheme known as “loan kiting.” The loan kiting scheme became necessary when conspirators were unable to make payments on loans made early in the scheme. Seven Falls and another luxury residential golf development by Vinson named “Queens Gap” failed, resulting in millions in property losses. In addition, both banks failed and were taken over by the FDIC. Vinson’s co-conspirators were previously sentenced for their roles in the scheme.
Maryland Man Sentenced for Stealing from a Charity
On June 19, 2015, in Baltimore, Maryland, William Peters, of Glen Burnie, was sentenced to 18 months in prison, three years of supervised release and ordered to forfeit and pay restitution of $4 million. Peters previously pleaded guilty to conspiring to commit mail and wire fraud and conspiring to commit money laundering. According to his plea, Peters was a board member of a charity that provided financial support to Native American communities and individuals. Peters and co-conspirator Brian J. Brown, the former president of the charity, falsely represented that if the charity funded Charity One, Inc., a nonprofit corporation Brown created and controlled, Charity One would use the funds for scholarships for American Indians. Peters used his board membership position to cause the charity to execute a series of endowment agreements in which the charity agreed to fund Charity One with $1 million per year for five years. However, Peters and Brown distributed the proceeds of their fraud scheme to themselves. Peters created and controlled a corporation called August First, Inc., which he used to receive and distribute to himself $950,244 of the fraud proceeds. Brown created and controlled a corporation called Aria Inc. to receive and distribute to himself $3,011,751 of the proceeds. Peters and Brown falsely characterized the funds as consulting fees on their federal income tax returns filed for 2006 to 2009 in order to conceal the source of these funds. Peters has agreed that the actual loss to the charity is $4 million. Brian Brown, of Beaverton, Oregon, was sentenced in Oregon on May 7, 2015 to 37 months in prison.
Colorado Man Sentenced to Prison for Investment Fraud Scheme
On June 18, 2015, in Denver, Colorado, Gary Snisky, of Longmont, Colorado was sentenced to 84 months in prison, three years supervised release and ordered to pay $2,531,032 in restitution to the victims. Snisky pleaded guilty on Jan. 5, 2015 to mail fraud and money laundering charges. Snisky’s co-conspirator, Richard Greeott, was previously sentenced to six months in prison for his significantly smaller role in the scheme. According to court documents, from 2009 through 2011, Snisky operated Colony Capital in Colorado, which purported to be a private equity firm offering investment opportunities in bonds, futures trading, and other offerings. In 2011, Snisky shut down Colony Capital and formed Arete, which operated in a similar manner. As part of his scheme, Snisky repeatedly falsely told financial advisors and investors that he was an “institutional trader” who was “on Bloomberg,” which Snisky claimed made him part of an elite group of people who could “make markets” and who had access to lucrative opportunities to which ordinary investors did not have access. From July 2011 through January 2013, Snisky offered investors a “proprietary value model” which was based on using the investors’ money to purchase Ginnie Mae bonds. Throughout 2012, Snisky continued to make false assurances about the safety of investing in the Bond Program despite the fact that Snisky knew that he had not purchased any Ginnie Mae bonds as promised. Snisky sent fabricated account statements to investors that falsely reflected that their money had been invested in the bonds as promised. Additionally, in 2010, Snisky asked Greeott to develop an algorithm to support a fully-automated trading system for trading in the futures market. The algorithm was never implemented however, Snisky falsely led investors, potential investors, and financial advisors to believe the algorithm was being used, to profitably trade in the futures market. Based on these false representations, several victims invested money in Snisky’s futures trading program. The net loss Snisky caused to investors in the bond and futures trading programs was $5,226,965.
Salesman Sentenced for Role in Bribes-For-Test-Referrals Scheme Involving New Jersey Clinical Lab
On June 17, 2015, in Newark, New Jersey, Len Rubinstein, of Holmdel, was sentenced to 37 months in prison, one year of supervised release and ordered to forfeit $250,000 and pay a $10,000 fine. Rubinstein previously pleaded guilty to one count of conspiracy to commit bribery and one count of money laundering for his role in a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous Associates. According to court documents, from May 2012 through April 2013, Rubinstein agreed with BLS president David Nicoll, of Mountain Lakes, his brother, Scott Nicoll, of Wayne, and others to pay doctors to refer patients to BLS for testing of blood specimens. Rubinstein paid cash bribes to doctors as part of the conspiracy. Rubinstein admitted he used Delta Consulting Group LLC – an entity he controlled – to hide the money he received from BLS and used to make bribe payments to doctors.
California Man Sentenced for Defrauding Investors Out of Almost $1 Million
On June 16, 2015, in Portland, Oregon, Bryan Scott Gunn, of Victorville, California, was sentenced to 20 months in prison, three years of supervised release and ordered to pay $939,308 in restitution. According to court documents, Gunn executed schemes conning investors out of almost $1 million. For the first scam, Gunn convinced his victims to invest more than $500,000 in an alleged heavy equipment leasing company, Republic Funding LLC, promising a high rate-of-return. During the scheme, Gunn showed the investors documentation that falsely showed the alleged company was profitable. Gunn diverted the investors’ money for his personal use. When the investors began to seek a return on their investment and began to challenge Gunn’s claims about the alleged business, he started his second swindle. Gunn created two fictitious companies, a few fictitious employees, and a fictitious attorney, including corresponding email accounts, to conceal his fraud. Gunn told the investors that he had sold the equipment leasing business’ portfolio to one of his fictitious companies, CMC Funding. When the investors sought payment from the sale of the portfolio, Gunn explained that CMC Funding had filed for bankruptcy and that its assets, including the portfolio, were being purchased by Fidelity LLC, Gunn’s other fictitious entity. Gunn, using letters and emails, posed as employees of Fidelity and as an attorney, and falsely claimed that costs associated with the bankruptcy needed to be paid before the investors could receive any payment for the alleged purchase of the portfolio. The investors paid more than $411,000 in an attempt to recover some of their investment. Gunn continued to use their money to live lavishly. At one point, in an attempt to appease the investors, Gunn created and gave two bogus checks to the investors as a payout. The checks, one for $314,113 and the other for $1,169,887, appeared to be issued from CMC Funding and to be drawn on an account at a Federal Credit Union. After depositing the checks, the investors quickly learned that the checks were fraudulent and that the account at the Federal Credit Union did not exist.
Day Trader Sentenced for Investment Fraud Scheme
On June 16, 2015, in Pocatello, Idaho, Michael Justin Hoopes, of Rexburg, Idaho, w