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Washington man pleads guilty to wire fraud charge

A 44-year-old Seattle-area man has entered guilty pleas to charges of wire fraud and making false statements to the Securities and Exchange Commission. The former investment advisor is accused of operating a Ponzi scheme that ended up costing his investors approximately $3.7 million between 2006 and 2015. Media outlets reported on March 20 that prosecutors had reached an agreement with the man's attorneys that calls for a custodial sentence of about 66 months.

The man has faced a barrage of legal issues in recent years. A lawsuit filed against him by the SEC was settled in 2015 when he agreed to pay $1.3 million to several former clients, and the bankruptcy trustee overseeing his Chapter 11 case accused him of deceiving the court in 2016. The trustee's suspicions may have been aroused by a Chapter 11 petition that declared monthly household income of about $1,000 less than the monthly rent on the man's Bellevue residence.

Prosecutors claim that the man continued to solicit money from his investors even after settling the SEC lawsuit, and they say that some of this money was used to pay earlier investors to keep the scheme afloat. The man is said to have used the rest of the funds to cover his personal expenses. Charging documents reveal that 17 of the man's clients lost money in the scheme. The man is also accused of making false statements to SEC auditors in 2015.

Complex white collar crimes like fraud and embezzlement often present prosecutors with a number of thorny problems. Intricate financial regulations can seem incomprehensible to juries, and litigating these cases can be time-consuming and expensive. Experienced criminal defense attorneys may understand the pressure that prosecutors work under, and they could offer to resolve complicated cases quickly in return for leniency.

Source: The Seattle Times, Former investment adviser in Bellevue charged with fraud, Staff report, March 14, 2017

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