When people think of someone who is convicted for a white collar crime, they immediately think of an underhanded scam artist who just wants to steal their money. This is most certainly not the case for many people. In some cases, a person can simply get overwhelmed in a situation they cannot control and make mistakes.
Recently, a Middleville man was sentenced to a year in prison and was ordered to pay $950,000 in restitution for his role in investment fraud. He had already pled guilty to wire fraud, and following his sentencing, he wanted to explain what went wrong.
According to the man, he was initially trying to make investments for his family and friends. At first, he found success and was able to generate a profit. However, they started losing money. Rather than break the news to his investors, he kept the losses quiet and continued to pull in new investors.
In his effort to show that his investments were successful, the man used the money for additional trading while paying out bogus interest payments to his investors. He ended up losing nearly all of the $1 million he had raised.
The man's attorney claimed that although there is evidence of a Ponzi scheme in the man's actions, it was such a small part of the overall money that was involved. His intention was not to defraud his investors or steal money from his friends and family.
The judge agreed. She took into account the man's lack of a criminal history, the support he received from friends and family who lost money in the deal and the fact that his is an Air Force veteran when handing down her sentence. She stated that the man made a mistake by getting involved in the risky trading situation, but did not believe his intentions were corrupt. While federal sentencing regulations requested that the man receive over 40 months in prison, the judge lowered this to one year.
This case is an excellent example of how people can get in over their heads. Especially when it comes to investing and international trading, the situations can be so complex that negative consequences can spiral out of control. People who have been charged with similar counts of investment or mail fraud should seriously consider contacting an attorney. This situation illustrates the importance of having knowledgeable legal support on your side.
Source: mlive.com, "Middleville man who lost $1 million in investment scheme explains what went wrong before being sent to prison," John Tunison, April 5, 2012