3 men's assets targeted

3 men's assets targeted

There are 26676 comments on the The State story from May 30, 2007, titled 3 men's assets targeted. In it, The State reports that:

S.C. Attorney General Henry McMaster seeks to permanently freeze the assets of an alleged $17 million investment scheme at a hearing today.

Join the discussion below, or Read more at The State.

ZZZZ

AOL

#16699 Feb 6, 2008
ZZZZ wrote:
Ogden businessman will plead guilty in massive fraud
By Tom Harvey
The Salt LakeTribune
Article Last Updated: 02/06/2008 04:49:47 PM MST
Posted: 4:47 PM- In one of the largest fraud cases in Utah history, Ogden businessman Val E. Southwick was charged in state court today with nine felony charges for allegedly bilking 817 investors out of $140 million in what is described as a massive Ponzi scheme involving a web of real estate development and financing companies.
Southwick's attorney, Max Wheeler, said the filing of state charges and a civil complaint by the Securities and Exchange Commission took place after negotiations. Southwick will plead guilty to at least some of the charges and will cooperate with authorities still trying to unravel his financial affairs and trace where investors' money went, Wheeler said.
A court appearance set for Friday has been postponed and not yet rescheduled, the attorney said.
The SEC complaint filed in federal court alleges Southwick engaged in fraud through the creation or use of 150 companies. He allegedly received $180 million from investors, according the SEC, assuring them their money was secured and that the projects were profitable.
"Instead, Southwick operated a massive Ponzi scheme, paying existing noteholders with funds from new investors," the SEC complaint says.
In more than 17 years in business, Southwick raised more than $445 million from banks and professional and unsophisticated investors.Money from investors often was used to repay other investors and pay Southwick and his family's living expenses, the SEC said.
Southwick, 62, has been under investigation by state and federal regulators, the IRS and Securities and Exchange Commission since at least 2006. He faces up to 15 years in prison on each felony count. Southwick filed for bankruptcy in federal court through one of his companies, VesCor Capital Inc., in May 2007, about a year after he stopped paying investors promised interest.
According to court testimony, the interlocking companies were used as vehicles through which Southwick or company officers moved funds around to pay investors or bills, depending on which entity had money at the time. Money from investors went into various companies and was used to pay obligations not necessarily related to the manner in which investors were told their funds were to be used.
Among creditors are several hundred Utahns and investors from 29 other states and three foreign countries
Before anyone asks, this case is an example of a very long running Ponzi scheme, 17 years, covering 30 states and 3 countries. Also, the scheme collapsed last May 2007 and even though the scammer has negoitated a guilty plea and cooperated, chaarges were just filed.
ZZZZ

AOL

#16700 Feb 6, 2008
Pair Convicted In $55M Billboard Ponzi Scheme

Wednesday, Feb 06, 2008 - 04:44 PM Updated: 05:03 PM

By NBC17

RALEIGH, N.C.-- Two people were convicted of conspiracy and mail fraud Wednesday for operating a ponzi scheme in North Carolina and other states that pulled in $55 million.

Scott Hollenbeck, 53, of Orlando and Laurinda Holohan, 63, of Concord, Ohio were convicted in U.S. Federal Court in Raleigh.

A third person, Barry C. Maloney, 65, of Bethesda, Maryland was acquitted on all counts. Three others had been charged and previously pled guilty in the case, including Raleigh resident Arthur J. Anderson, Jr., 49.

Hollenbeck and Holohan operated Mobile Billboards of America, Inc., which claimed to be a legitimate “business opportunity” for investors seeking monthly income during retirement.

In exchange for investments in increments of $20,000, investors were promised they would receive “guaranteed” monthly checks based on a return of 13.49 percent and the return of their entire investment at the end of seven years.

Investors were told their $20,000 was used to purchase billboards on the sides of trucks, and
that advertising revenue from those billboards was used to make the monthly payments.

Instead, Mobile Billboards was operated as ponzi scheme, where investments by new investors were used to make payments to previous investors, and to enrich the defendants.

The scheme fell apart in September, 2004, when the U.S. Securities and Exchange Commission sued the company, and it was discovered that mobile billboards had almost no advertising revenue and that no know billboards operated. Instead, thousands of unassembled billboard parts were found in a warehouse in Brevard, N.C.

Hollenbeck was an insurance agent and leading salesman of Mobile Billboards. He sold about $10 million in billboard investments, primarily in and around Kernersville, N.C.

Holohan handled the operation's extensive banking transactions.

Though the investigation began about the same time 3HB/CCG came into existence, September 2004, the convictions just came down today, two years and four months later. The IR was convicted in this one, too.
ZZZZ

AOL

#16701 Feb 6, 2008
ZZZZ wrote:
Pair Convicted In $55M Billboard Ponzi Scheme
Wednesday, Feb 06, 2008 - 04:44 PM Updated: 05:03 PM
By NBC17
RALEIGH, N.C.-- Two people were convicted of conspiracy and mail fraud Wednesday for operating a ponzi scheme in North Carolina and other states that pulled in $55 million.
Scott Hollenbeck, 53, of Orlando and Laurinda Holohan, 63, of Concord, Ohio were convicted in U.S. Federal Court in Raleigh.
A third person, Barry C. Maloney, 65, of Bethesda, Maryland was acquitted on all counts. Three others had been charged and previously pled guilty in the case, including Raleigh resident Arthur J. Anderson, Jr., 49.
Hollenbeck and Holohan operated Mobile Billboards of America, Inc., which claimed to be a legitimate “business opportunity” for investors seeking monthly income during retirement.
In exchange for investments in increments of $20,000, investors were promised they would receive “guaranteed” monthly checks based on a return of 13.49 percent and the return of their entire investment at the end of seven years.
Investors were told their $20,000 was used to purchase billboards on the sides of trucks, and
that advertising revenue from those billboards was used to make the monthly payments.
Instead, Mobile Billboards was operated as ponzi scheme, where investments by new investors were used to make payments to previous investors, and to enrich the defendants.
The scheme fell apart in September, 2004, when the U.S. Securities and Exchange Commission sued the company, and it was discovered that mobile billboards had almost no advertising revenue and that no know billboards operated. Instead, thousands of unassembled billboard parts were found in a warehouse in Brevard, N.C.
Hollenbeck was an insurance agent and leading salesman of Mobile Billboards. He sold about $10 million in billboard investments, primarily in and around Kernersville, N.C.
Holohan handled the operation's extensive banking transactions.
Though the investigation began about the same time 3HB/CCG came into existence, September 2004, the convictions just came down today, two years and four months later. The IR was convicted in this one, too.
Correction: three years and four months later
drake

Winston Salem, NC

#16702 Feb 6, 2008
ZZZZ wrote:
<quoted text>
Before anyone asks, this case is an example of a very long running Ponzi scheme, 17 years, covering 30 states and 3 countries. Also, the scheme collapsed last May 2007 and even though the scammer has negoitated a guilty plea and cooperated, chaarges were just filed.
Excellent info. Supporters won't be able to comprehend.
Justice

United States

#16703 Feb 7, 2008
ZZZZ wrote:
Pair Convicted In $55M Billboard Ponzi Scheme
Wednesday, Feb 06, 2008 - 04:44 PM Updated: 05:03 PM
By NBC17
RALEIGH, N.C.-- Two people were convicted of conspiracy and mail fraud Wednesday for operating a ponzi scheme in North Carolina and other states that pulled in $55 million.
Scott Hollenbeck, 53, of Orlando and Laurinda Holohan, 63, of Concord, Ohio were convicted in U.S. Federal Court in Raleigh.
A third person, Barry C. Maloney, 65, of Bethesda, Maryland was acquitted on all counts. Three others had been charged and previously pled guilty in the case, including Raleigh resident Arthur J. Anderson, Jr., 49.
Hollenbeck and Holohan operated Mobile Billboards of America, Inc., which claimed to be a legitimate “business opportunity” for investors seeking monthly income during retirement.
In exchange for investments in increments of $20,000, investors were promised they would receive “guaranteed” monthly checks based on a return of 13.49 percent and the return of their entire investment at the end of seven years.
Investors were told their $20,000 was used to purchase billboards on the sides of trucks, and
that advertising revenue from those billboards was used to make the monthly payments.
Instead, Mobile Billboards was operated as ponzi scheme, where investments by new investors were used to make payments to previous investors, and to enrich the defendants.
The scheme fell apart in September, 2004, when the U.S. Securities and Exchange Commission sued the company, and it was discovered that mobile billboards had almost no advertising revenue and that no know billboards operated. Instead, thousands of unassembled billboard parts were found in a warehouse in Brevard, N.C.
Hollenbeck was an insurance agent and leading salesman of Mobile Billboards. He sold about $10 million in billboard investments, primarily in and around Kernersville, N.C.
Holohan handled the operation's extensive banking transactions.
Though the investigation began about the same time 3HB/CCG came into existence, September 2004, the convictions just came down today, two years and four months later. The IR was convicted in this one, too.
Loylaty/Joe Jr. are you starting to understand you dumb fu-ck?? Rome was not built in a day. The more complicated the crime, the more it takes time. ZZZ puts out these articles as prime examples that you have no clue what-so-ever
Justice

United States

#16704 Feb 7, 2008
ZZZZ wrote:
Pair Convicted In $55M Billboard Ponzi Scheme
Wednesday, Feb 06, 2008 - 04:44 PM Updated: 05:03 PM
By NBC17
RALEIGH, N.C.-- Two people were convicted of conspiracy and mail fraud Wednesday for operating a ponzi scheme in North Carolina and other states that pulled in $55 million.
Scott Hollenbeck, 53, of Orlando and Laurinda Holohan, 63, of Concord, Ohio were convicted in U.S. Federal Court in Raleigh.
A third person, Barry C. Maloney, 65, of Bethesda, Maryland was acquitted on all counts. Three others had been charged and previously pled guilty in the case, including Raleigh resident Arthur J. Anderson, Jr., 49.
Hollenbeck and Holohan operated Mobile Billboards of America, Inc., which claimed to be a legitimate “business opportunity” for investors seeking monthly income during retirement.
In exchange for investments in increments of $20,000, investors were promised they would receive “guaranteed” monthly checks based on a return of 13.49 percent and the return of their entire investment at the end of seven years.
Investors were told their $20,000 was used to purchase billboards on the sides of trucks, and
that advertising revenue from those billboards was used to make the monthly payments.
Instead, Mobile Billboards was operated as ponzi scheme, where investments by new investors were used to make payments to previous investors, and to enrich the defendants.
The scheme fell apart in September, 2004, when the U.S. Securities and Exchange Commission sued the company, and it was discovered that mobile billboards had almost no advertising revenue and that no know billboards operated. Instead, thousands of unassembled billboard parts were found in a warehouse in Brevard, N.C.
Hollenbeck was an insurance agent and leading salesman of Mobile Billboards. He sold about $10 million in billboard investments, primarily in and around Kernersville, N.C.
Holohan handled the operation's extensive banking transactions.
Though the investigation began about the same time 3HB/CCG came into existence, September 2004, the convictions just came down today, two years and four months later. The IR was convicted in this one, too.
Loyalty/Joe Jr. in your fu-cking face!!!
drake

Winston Salem, NC

#16705 Feb 7, 2008
Justice wrote:
<quoted text>
Loyalty/Joe Jr. in your fu-cking face!!!
Supporters won't be able to understand. That is what happens when one is brain washed.
Mr Smart

AOL

#16706 Feb 7, 2008
Justice wrote:
<quoted text>
Loyalty/Joe Jr. in your fu-cking face!!!
Do you understanding you dumb Fu-ck; I'm spending YOUR 100K. I'll let you know when I'm running low!
Mr Smart

AOL

#16707 Feb 7, 2008
Justice wrote:
<quoted text>
Loylaty/Joe Jr. are you starting to understand you dumb fu-ck?? Rome was not built in a day. The more complicated the crime, the more it takes time. ZZZ puts out these articles as prime examples that you have no clue what-so-ever
Just Keep counting the days for this case to go to court with ZZZ while I go out and spend your money on lap-dances and Christal. If you send your wife down to Gentlemens Club in ATL I might consider tipping her broke ASS.
Justice

United States

#16708 Feb 7, 2008
Mr Smart wrote:
<quoted text>
Do you understanding you dumb Fu-ck; I'm spending YOUR 100K. I'll let you know when I'm running low!
Call's me a dumb fu-ck and says and I quote," do you understanding. You have to love the stupidity lol. Then he gives himself a screen name of Mr. Smart, and then proceeds to butcher the English language lol. Change it to Mr.Dumb A$$ lol.
Justice

United States

#16709 Feb 7, 2008
Mr Smart wrote:
<quoted text>
Just Keep counting the days for this case to go to court with ZZZ while I go out and spend your money on lap-dances and Christal. If you send your wife down to Gentlemens Club in ATL I might consider tipping her broke ASS.
I guess you never bought Cristal, because it is not spelled Christal lol. I can only imagine how dumb your mom and dad are Mr Dumb A$$ lol. I think the boys in Atlanta call it ATL because they can't spell the whole word lol. Yeah down in ATL Mr Dumb A$$ is so poor he goes to Kentucky Fried Chicken to lick other people's fingers. I picture Loyalty/Joe Jr. at an Elementary passing out flyers to grade school kids," saying can you go on your computer and support our cause?? Our following is gone and we just need any voice now.
Now you have a guy with the screen name of Mr. Smart spelling Cristal, Christal. You cannot make this sh-it up lol. Thanks for the laugh!!!
ZZZZ

AOL

#16710 Feb 7, 2008
Jury Hits Scammers on 522 Felony Counts
The main orchestrators of a $187-million scam targeting seniors now face anywhere from 28 to 117 years in prison for their actions.
By Matthew Dublin February 7, 2008
A California jury has convicted three men on a total of 522 felony charges relating to a scheme that netted over $187 million from more than 1,800 senior citizen investors.
For their role in the scheme, Daniel Heath, 51, formerly of Chino Hills, CA was found guilty on 400 felony counts and his 81 year-old father, John Heath, was found guilty on 52 counts. Fellow defendant Denis O’Brien, formerly of Yorba Linda, CA, was convicted on 70 felony counts.
The charges against the defendants include securities fraud, elder abuse, grand theft auto, money laundering, tax fraud, and conspiracy. Daniel Heath is facing a state prison sentence of 117 years, while John Heath and O’Brien, are looking at state prison sentences of 28 years and 37 years, respectively. Sentencing hearings for John Heath and O’Brien will be held later this month. Daniel Heath’s sentence will be determined in late March.
The Riverside, CA District Attorneys Office arrested the three men in 2004, along with fellow defendant Larre Jaye Schlarmann, of Carlsbad, CA. Schlarmann, also charged on the same counts, pleaded guilty and is currently serving out a 15-year sentence in a California state prison. Bail was set at $144 million for each defendant.
The case began when the Commission charged the men with fraud back in April of 2004. At that time, the Daniel Heath and O’Brien had already collected at least $60 million from 803 investors. In its complaint, the regulator alleged that Heath and O’Brien lured their unwitting elderly victims through “free lunch” seminars and workshops, where they were fooled into investing their retirement money in “secured” notes with “guaranteed” rates of return ranging from 5.5% to 8% per year.
According to the complaint, the Daniel Heath and O’Brien lied to investors by stating that their funds would be used to make secured loans to businesses. They also claimed that independent IRA administrators had conducted “due diligence” on the notes they were selling. The elderly victims were told that they would either be repaid their principal at maturity, or could redeem all or part of their investment prior to maturity, for a 10% penalty fee. All of those statements were patently false, charged the Commission. Some investors had threatened to file or had in fact filed lawsuits against the men in an attempt to get back their retirement money by the time the SEC stepped in.
ZZZZ

AOL

#16711 Feb 7, 2008
A permanent receiver has been appointed to handle all assets relating to the companies Heath controlled. Final judgments also enjoined O’Brien and Heath from violating the antifraud, securities registration, and broker-dealer registrations provisions for their conduct.
According to the Commission, the defendants had netted $144.8 million through the scheme from July 1993 through March 2004. Of the $144.8 million, investors had received roughly $36
million in purported principal and interest payments. According to the temporary receiver, at the time of the SEC’s action, the companies Heath controlled had lost money. Because of this fact, investors could have only been paid by from other investors’ money, making it a Ponzi scheme, stated the regulator.
In May 2005, a Los Angeles U.S. District Court entered final judgments against Daniel Heath and O’Brien. O’Brien was ordered to disgorge to the appointed receiver $2,526,157 plus $34,582 in pre-judgment interest. Heath was order to disgorge $106,031,605 plus pre-judgment totaling $3,302,553.
In September of 2007, the Commission charged two additional sales agents who worked for heath, Raul Jordan and Martin Duffield with violating antifraud, securities registration, and broker-dealer registrations provision for their alleged part in the scam. Jordan and Duffield are charged with selling more than $6 million in PCM notes to roughly 80 elderly investors throughout the country from July 2001 through April 2004. They allegedly lied to investors by claiming that the notes were “safe” and “secure.” According to the charges, the men also lied to investors about the source of the compensation they received from the sales, or falsely claimed that they received no compensation at all. Duffield and Jordan were paid sales commissions of $264,040 and $270,337, respectively, stated the complaint.
Both men were also forbidden from associating with any broker-dealer, with the option to reapply after five years to one of the self-regulatory organizations, including the SEC. The defendants were also ordered to disgorge all ill-gotten gains to the appointed receiver plus prejudgment interest. Duffield and Jordan consented to the court’s orders without admitting or denying guilt.
ZZZZ

AOL

#16712 Feb 7, 2008
Doeren Mayhew execs sued for fraud
By Bruce Kelly
February 7, 2008

Two directors of a Detroit area accounting firm – along with their wives – were instrumental in perpetuating a $250 million Ponzi scheme that collapsed last summer, according to a lawsuit filed Tuesday in Oakland County, Mich., circuit court.
The suit alleges that Doeren Mayhew & Co. PC and two directors, Todd Fox and James O’Rilley, along with their spouses, were a “de facto part of the management of the Ponzi scheme enterprise” that turned out to be a fraud.

The suit represents about 100 individuals and companies that invested in the Ponzi and seeks $20 million in damages as well as restitution of money lost in the investments.

Socializing was key in maintaining the investment scheme, according to the suit.

“Doeren Mayhew, through Messrs. Fox and O’Rilley, orchestrated and participated ‘dog-and-pony’ or ‘road’ shows targeting investors perceived to be the most vulnerable to the lure of ‘guaranteed high-return’ investments being offered,” according to the suit.

“These in-person marketing initiatives included dinners and barbeques at which Doeren Mayhew, through Mr. Fox, would speak individually to potential investors to tout the wisdom of taking a new position or maintaining an existing position” in the scheme’s offerings, which were in the form of bogus LLCs, according to the suit.

“At one point, Mr. Fox and Mr. O’Rilley delegated their investor-solicitation function to their wives.”

In November, the Securities and Exchange Commission charged Edward May with running the massive scheme that turned as many as 1,200 investors – many elderly - into victims.

According to investors and attorneys familiar with the matter, Mr. May, whose firm E-M Management Co. LLC of Lake Orion, Mich., in July stopped paying guaranteed monthly dividends on a series of companies that turned out to be fakes.

Doeren Mayhew of Troy, Mich., was prominently mentioned on prospectuses of many of the bogus companies sold by Mr., May, usually in shares of about $50,000.(InvestmentNews, Jan. 28)

Mark Crawford, Doeren Mayhew’s managing director, said that the suit was "just ridiculous stuff" and that Doeren Mayhew "never received any money up front and never got paid for anything other than tax returns."
drake

Winston Salem, NC

#16713 Feb 7, 2008
Mr Smart wrote:
<quoted text>
Just Keep counting the days for this case to go to court with ZZZ while I go out and spend your money on lap-dances and Christal. If you send your wife down to Gentlemens Club in ATL I might consider tipping her broke ASS.
That's the Moorish spirit! I guess you guess are know running strip club scams now.
ZZZZ

AOL

#16714 Feb 8, 2008
ZZZZ wrote:
Jury Hits Scammers on 522 Felony Counts
The main orchestrators of a $187-million scam targeting seniors now face anywhere from 28 to 117 years in prison for their actions.
By Matthew Dublin February 7, 2008
A California jury has convicted three men on a total of 522 felony charges relating to a scheme that netted over $187 million from more than 1,800 senior citizen investors.
For their role in the scheme, Daniel Heath, 51, formerly of Chino Hills, CA was found guilty on 400 felony counts and his 81 year-old father, John Heath, was found guilty on 52 counts. Fellow defendant Denis O’Brien, formerly of Yorba Linda, CA, was convicted on 70 felony counts.
The charges against the defendants include securities fraud, elder abuse, grand theft auto, money laundering, tax fraud, and conspiracy. Daniel Heath is facing a state prison sentence of 117 years, while John Heath and O’Brien, are looking at state prison sentences of 28 years and 37 years, respectively. Sentencing hearings for John Heath and O’Brien will be held later this month. Daniel Heath’s sentence will be determined in late March.
The Riverside, CA District Attorneys Office arrested the three men in 2004, along with fellow defendant Larre Jaye Schlarmann, of Carlsbad, CA. Schlarmann, also charged on the same counts, pleaded guilty and is currently serving out a 15-year sentence in a California state prison. Bail was set at $144 million for each defendant.
The case began when the Commission charged the men with fraud back in April of 2004. At that time, the Daniel Heath and O’Brien had already collected at least $60 million from 803 investors. In its complaint, the regulator alleged that Heath and O’Brien lured their unwitting elderly victims through “free lunch” seminars and workshops, where they were fooled into investing their retirement money in “secured” notes with “guaranteed” rates of return ranging from 5.5% to 8% per year.
According to the complaint, the Daniel Heath and O’Brien lied to investors by stating that their funds would be used to make secured loans to businesses. They also claimed that independent IRA administrators had conducted “due diligence” on the notes they were selling. The elderly victims were told that they would either be repaid their principal at maturity, or could redeem all or part of their investment prior to maturity, for a 10% penalty fee. All of those statements were patently false, charged the Commission. Some investors had threatened to file or had in fact filed lawsuits against the men in an attempt to get back their retirement money by the time the SEC stepped in.
This is an example of what can happen if the prosecution decides to throw in just about every applicable charge and the jury is very much offended by what the scammers have done (victimizing senior citizens). Somebody was mightily ticked off.
ZZZZ

AOL

#16715 Feb 8, 2008
ZZZZ wrote:
Doeren Mayhew execs sued for fraud
By Bruce Kelly
February 7, 2008
Two directors of a Detroit area accounting firm – along with their wives – were instrumental in perpetuating a $250 million Ponzi scheme that collapsed last summer, according to a lawsuit filed Tuesday in Oakland County, Mich., circuit court.
The suit alleges that Doeren Mayhew & Co. PC and two directors, Todd Fox and James O’Rilley, along with their spouses, were a “de facto part of the management of the Ponzi scheme enterprise” that turned out to be a fraud.
The suit represents about 100 individuals and companies that invested in the Ponzi and seeks $20 million in damages as well as restitution of money lost in the investments.
Socializing was key in maintaining the investment scheme, according to the suit.
“Doeren Mayhew, through Messrs. Fox and O’Rilley, orchestrated and participated ‘dog-and-pony’ or ‘road’ shows targeting investors perceived to be the most vulnerable to the lure of ‘guaranteed high-return’ investments being offered,” according to the suit.
“These in-person marketing initiatives included dinners and barbeques at which Doeren Mayhew, through Mr. Fox, would speak individually to potential investors to tout the wisdom of taking a new position or maintaining an existing position” in the scheme’s offerings, which were in the form of bogus LLCs, according to the suit.
“At one point, Mr. Fox and Mr. O’Rilley delegated their investor-solicitation function to their wives.”
In November, the Securities and Exchange Commission charged Edward May with running the massive scheme that turned as many as 1,200 investors – many elderly - into victims.
According to investors and attorneys familiar with the matter, Mr. May, whose firm E-M Management Co. LLC of Lake Orion, Mich., in July stopped paying guaranteed monthly dividends on a series of companies that turned out to be fakes.
Doeren Mayhew of Troy, Mich., was prominently mentioned on prospectuses of many of the bogus companies sold by Mr., May, usually in shares of about $50,000.(InvestmentNews, Jan. 28)
Mark Crawford, Doeren Mayhew’s managing director, said that the suit was "just ridiculous stuff" and that Doeren Mayhew "never received any money up front and never got paid for anything other than tax returns."
This case is an example of what defrauded Ponzi investors can do through civil litigation against solicitors (IRs) and even their spouses.
Get A Grip

AOL

#16716 Feb 8, 2008
ZZZZ wrote:
Jury Hits Scammers on 522 Felony Counts
The main orchestrators of a $187-million scam targeting seniors now face anywhere from 28 to 117 years in prison for their actions.
By Matthew Dublin February 7, 2008
A California jury has convicted three men on a total of 522 felony charges relating to a scheme that netted over $187 million from more than 1,800 senior citizen investors.
For their role in the scheme, Daniel Heath, 51, formerly of Chino Hills, CA was found guilty on 400 felony counts and his 81 year-old father, John Heath, was found guilty on 52 counts. Fellow defendant Denis O’Brien, formerly of Yorba Linda, CA, was convicted on 70 felony counts.
The charges against the defendants include securities fraud, elder abuse, grand theft auto, money laundering, tax fraud, and conspiracy. Daniel Heath is facing a state prison sentence of 117 years, while John Heath and O’Brien, are looking at state prison sentences of 28 years and 37 years, respectively. Sentencing hearings for John Heath and O’Brien will be held later this month. Daniel Heath’s sentence will be determined in late March.
The Riverside, CA District Attorneys Office arrested the three men in 2004, along with fellow defendant Larre Jaye Schlarmann, of Carlsbad, CA. Schlarmann, also charged on the same counts, pleaded guilty and is currently serving out a 15-year sentence in a California state prison. Bail was set at $144 million for each defendant.
The case began when the Commission charged the men with fraud back in April of 2004. At that time, the Daniel Heath and O’Brien had already collected at least $60 million from 803 investors. In its complaint, the regulator alleged that Heath and O’Brien lured their unwitting elderly victims through “free lunch” seminars and workshops, where they were fooled into investing their retirement money in “secured” notes with “guaranteed” rates of return ranging from 5.5% to 8% per year.
According to the complaint, the Daniel Heath and O’Brien lied to investors by stating that their funds would be used to make secured loans to businesses. They also claimed that independent IRA administrators had conducted “due diligence” on the notes they were selling. The elderly victims were told that they would either be repaid their principal at maturity, or could redeem all or part of their investment prior to maturity, for a 10% penalty fee. All of those statements were patently false, charged the Commission. Some investors had threatened to file or had in fact filed lawsuits against the men in an attempt to get back their retirement money by the time the SEC stepped in.
Imagine that, even a guarantee of 5.5% to 8% was no good. The boys promised returns of 120%(long-term) and much higher (mortgage satisfaction). Scam or no-scam, you decide.
drake

Winston Salem, NC

#16717 Feb 8, 2008
ZZZZ wrote:
<quoted text>
This is an example of what can happen if the prosecution decides to throw in just about every applicable charge and the jury is very much offended by what the scammers have done (victimizing senior citizens). Somebody was mightily ticked off.
Excellent info and thanks for breaking this down for the slow and selective readers.
drake

Winston Salem, NC

#16718 Feb 8, 2008
ZZZZ wrote:
<quoted text>
This case is an example of what defrauded Ponzi investors can do through civil litigation against solicitors (IRs) and even their spouses.
It is amazing how many of these cases are out there on the streets. Thanks for posting. It appears there is one everyday that hits the news are in the courtroom. Apparently, the punishment and the laws are not strong enough to reduce this. I am sending a message to my congressman/women on this issue where their needs to be more laws to slow these scams down.

For those supporter that wonder why their isn't a court date, see how busy the FBI and states are dealing with your type of garbage scams? The market is filled with these scams. By the way, I haven't seen one get away with it yet. I am sure they had "different process" as well. Just hang in their your court date will be soon. Change is coming and so is the law.

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