FINANCE EXEC SENTENCE TO PRISON FOR OBSTRUCTION OF JUSTICE

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, August 23, 2016

Financial Services Company Executive Sentenced to 15 Months for Obstruction of Justice

The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, was sentenced today in the U.S. District Court for the Western District of North Carolina to 15 months in prison for engaging in an elaborate obstruction of justice scheme to conceal from the government millions of dollars, which were subject to a freeze order and seizure warrant.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina; Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division; and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.

On March 23, Jaymes Meyer, aka James Meyer, 47, pleaded guilty to one count of obstruction of justice.  In addition to imposing the prison term, U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina entered a monetary judgment of $4.8 million against Meyer.

According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts.  As a result of its investigation, the SEC filed a civil enforcement action against RVG, resulting in an order freezing all of RVG’s assets and appointing a receiver to marshal, manage and distribute remaining RVG assets to impacted investors.  The U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants.  Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the freeze order and requested that Meyer freeze any RVG assets in his possession, custody or control.

According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets.  Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control after learning about the SEC’s investigation and used that money to purchase homes in Napa and the Turks and Caicos, and took additional measures to conceal his RVG assets.

Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.

In connection with his plea agreement, Meyer consented to the $4.8 million money judgment entered against him and forfeited the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense.

The U.S. Secret Service and IRS-CI investigated the case.  Assistant U.S. Attorney Jennifer Grus Sugar of the Western District of North Carolina and Trial Attorneys Kevin Lowell and Brian D. Frey of the Criminal Division’s Asset Forfeiture and Money Laundering Section – Bank Integrity Unit prosecuted the case.

SEC BRINGS CHARGES IN CASE INVOLVING ALLEGED MISAPPROPRIATION OF MONEY FROM AN INVESTMENT FUND

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION  

Litigation Release No. 23207 / February 26, 2015

Securities and Exchange Commission v. Daniel Thibeault et al., Civil Action No. 1:15-cv-10050 (D. MA)

CEO of Massachusetts-Based Investment Advisory Companies Indicted On Charges of Fraud, Obstruction of Justice

The Securities and Exchange Commission announced that on February 25, 2015, Daniel Thibeault, the CEO of a group of Massachusetts-based investment advisory companies, was criminally charged by a grand jury in the United States District Court for the District of Massachusetts in connection with the alleged misappropriation of more than $15 million from an investment fund. The SEC previously filed a civil enforcement action against Thibeault and others in January 2015. The criminal indictment charges Thibeault with securities fraud, wire fraud, and aggravated identity theft. The indictment also charges Thibeault with obstruction of justice, alleging that Thibeault sought to obstruct the SEC's prior investigation by intentionally misleading SEC examiners.

The allegations in the criminal indictment stem from the same misconduct underlying the SEC's pending civil enforcement action against Thibeault and the associated entities concerning the alleged misappropriation of money from an investment fund. In a complaint filed in federal court on January 9, 2015, the SEC named Thibeault as a defendant, along with the following entities, all believed to be controlled by Thibeault: Graduate Leverage, LLC; GL Capital Partners, LLC; GL Investment Services, LLC; and Taft Financial Services, LLC. The SEC also charged two other parties as relief defendants based on their alleged receipt of investor funds: GL Advisor Solutions, Inc., a corporation based in the Philippines that is controlled by Graduate Leverage, LLC and Thibeault; and Shawnet Thibeault, who is Daniel Thibeault's wife.

The SEC's complaint alleges that GL Capital Partners, LLC and its principal, Daniel Thibeault, were the investment advisers to a fund called the GL Beyond Income Fund, and that they misappropriated money that belonged to this fund. The GL Beyond Income Fund's assets consisted primarily of individual variable rate consumer loans. The SEC alleges that beginning in 2013 or earlier, Thibeault and the other defendants engaged in a scheme to divert investor money from the GL Beyond Income Fund by creating fake loans and reporting those fake loans as assets of the GL Beyond Income Fund, using the names and personal information of individuals who were unaware that loans were being originated. The complaint further alleges that the GL Beyond Income Fund disbursed millions of dollars to fund these fictitious loans, but the borrowed money did not go to the purported borrowers whose names appeared on the documentation; instead, the SEC alleges, it was transferred to Thibeault and the other defendants who used the money for personal expenses and to run businesses other than the GL Beyond Income Fund, and used it to conceal and perpetuate the scheme by making "interest payments" on fake loans.

Thibeault was originally charged by a criminal complaint and was arrested on December 11, 2014. The SEC's action against Thibeault and the other defendants, which is pending, seeks disgorgement of ill-gotten gains plus pre-judgment interest and penalties and permanent injunctions against further violations of the securities laws. On January 21, 2015, the United States District Court for the District of Massachusetts imposed an asset freeze against Thibeault and the other defendants and relief defendants and ordered certain other preliminary relief.

For further information, see Litigation Release No. 23171 (January 9, 2015) [Civil Complaint]; Litigation Release No. 23178 (January 22, 2015).

MULTIMILLION DOLLAR PONZI FRAUDSTER GETS 33 YEARS IN PRISON

FROM:  SECURITIES AND EXCHANGE COMMISSION 

April 11, 2012

Robert Stinson, Jr. Sentenced to 33 Years in Prison and Ordered to Pay $14 Million in Restitution for Orchestrating Multimillion Dollar Ponzi SchemeThe Securities and Exchange Commission announced that on April 10, 2012, Robert Stinson, Jr., of Berwyn, Pennsylvania, was sentenced in a parallel criminal action for orchestrating a Ponzi scheme that defrauded at least 263 investors of more than $17 million. Judge Michael M. Baylson of the United States District Court for the Eastern District of Pennsylvania sentenced Stinson to 33 years in federal prison, followed by three years of supervised release, and ordered him to pay more than $14 million in restitution. On August 15, 2011, Stinson pleaded guilty to five counts of wire fraud, four counts of mail fraud, nine counts of money laundering, one count of bank fraud, three counts of filing false tax returns, two counts of obstruction of justice, and two counts of making false statements to federal agents.

On June 29, 2010, the Commission filed a civil injunctive action against Stinson and related persons and entities based on the same conduct, and sought and obtained a Temporary Restraining Order and Order Freezing Assets and the appointment of a receiver. According to the Commission’s complaint, from 2004 through June 2010, Stinson, primarily through Life’s Good, Inc. and Keystone State Capital Corporation, two companies he controlled, sold purported “units” in four Life’s Good private real estate hedge funds. Stinson falsely claimed that the Life’s Good funds generated annual returns of 10 to 16 percent by originating more than $30 million in commercial mortgage loans, and other investment income gained on the sale of foreclosure and investment properties. The Commission’s complaint alleges that Stinson stole investor funds for his personal use, transferred money to family members and others, and used new investor proceeds to pay existing investors as part of a Ponzi scheme. On June 20, 2011, the United States District Court entered partial summary judgment against Stinson and his co-defendants, finding violations of the federal securities laws and ordering permanent injunctive relief. The court deferred the determination of the amount of disgorgement and prejudgment interest, as well as the imposition of any civil penalties.