Man sentenced for defrauding investors out of $3.4 million

| Sep 11, 2020 | Criminal Defense, Criminal Defense, White Collar Crimes |

Fraud is a type of white-collar crime committed by individuals and businesses in South Carolina and across the United States. While this type of crime can be prosecuted under state law, it is usually handled by federal prosecutors. For example, on Aug. 31, a U.S. district court sentenced a California man to three years in federal prison for operating an investment scheme that defrauded investors out of over $3.4 million.

The case before the court

According to court documents, the defendant, a 73-year-old Santa Barbara resident, ran a financial services firm from Oct. 2010 to Oct. 2015. During this period of time, he falsely promised investors that he could purchase shares of several prominent social media companies and online businesses before their initial public offerings. These companies included Facebook, Twitter, Etsy, Alibaba and E-Waste. He claimed that these investment opportunities were “amazing” and would provide investors with a high rate of return. He further claimed that he and his financial firm were licensed financial brokers. However, none of his claims were true.

An FBI investigation revealed that the defendant failed to buy the promised stocks on behalf of the investors. Instead, he used their funds to day trade other stocks, gamble, buy cars, travel and pay personal bills. He also used some of the money to pay legal expenses he incurred when the U.S. Securities and Exchange Commission investigated his activities. The defendant was sentenced to 36 months in prison and ordered to pay his victims $3,416,628 in restitution.

Criminal defense

As this case demonstrates, individuals convicted of white collar crimes can face years in prison and heavy fines. However, defendants might be able to obtain a better outcome by contacting a criminal defense attorney as soon as possible. Depending on the details of the case, the attorney might be able to get the charges dropped or negotiate a favorable plea deal.