Disbarred California Attorney Sentenced To Five And A Half Years In Prison For Long-Running Multi-Million-Dollar Investment Fraud Scheme | USAO-SDNY

Johnnie Pratt

Damian Williams, the United States Legal professional for the Southern District of New York, introduced that DEREK JONES, a disbarred California lawyer, was sentenced currently to 5 and a fifty percent a long time in jail.  JONES ran fraudulent investment money, which include genuine-estate expenditure companies and a undertaking-cash organization, as a result of which he defrauded traders of above $8.6 million about a interval of a lot more than seven a long time, from at minimum 2012 as a result of 2019.  JONES formerly pled responsible to just one rely of wire fraud and was sentenced right now ahead of United States District Judge Loretta A. Preska.

U.S. Lawyer Damian Williams stated: “When investors purchase shares in true-estate money and other expense funds, those people investors have each and every correct to hope that the men and women advertising and marketing and providing those investments are dealing with them honestly and telling them the truth about their investments.  Today, Derek Jones, a disbarred lawyer, was held accountable for violating this appropriate about an extended period of time of time, advertising pursuits in real estate that he falsely claimed to possess and defrauding his traders out of thousands and thousands of dollars.”

In accordance to the Indictment, statements built in court, and other publicly filed paperwork in this circumstance:

From at least 2012 via at least 2019, JONES deceived his victims into investing in several companies and investment cash that he controlled, together with purported authentic-estate advancement and expense corporations employing versions of the names “BlueRidge,” “Living City,” and “Atiswin,” and the purported enterprise funds company Realize Holdings (“Realize”).  

In fraudulently inducing victims to commit in his money, JONES routinely lied to traders, like in glossy brochures and legal files that contained misrepresentations about true estate that JONES falsely claimed was owned or normally controlled by BlueRidge, Living Metropolis, and Atiswin.  For example, JONES falsely informed traders and prospective traders that BlueRidge was developing a “resort village” on land it managed on Semiahmoo Spit in Washington Condition and, independently, that BlueRidge had obtained an current lodge in that exact locale, when in fact neither BlueRidge nor JONES owned or controlled any of that home.  In other situations, JONES falsely claimed that his providers have been under agreement to obtain a ranch in Colorado and that his firms had secured extended-phrase leases for many items of residence slated for growth, including California qualities in Santa Monica, Hermosa Seaside, and Los Angeles.  Instead of working with investors’ funds as he promised, JONES misappropriated investors’ dollars, utilizing a lot of it to make Ponzi-type payments to other investors to whom he owed dollars in link with before transactions and for individual and relatives fees, together with the non-public-faculty tuition of his youngsters.

In executing his plan, JONES also sent falsified and counterfeit paperwork to investors and other people.  For illustration, on recurring occasions, JONES furnished doctored lender statements exhibiting that he experienced millions of bucks in numerous company accounts, when in truth he experienced very little or no dollars in this kind of accounts.  On other events, he offered counterfeit financial statements that falsely purported to be dependent on inner audits of companies that he managed.  He also sent investors and other individuals falsified contracts with key webpages taken off, solid land-leases, and fictional statements of asset allocation.  JONES also utilised the names of other men and women — without the need of these individuals’ authorization or know-how — to connect by way of email with buyers and hence foster the illusion that JONES’s firms have been practical operations with authentic workforce.

In whole, JONES defrauded traders out of far more than $8.6 million.

For the duration of the fee of the fraud charged in this situation, JONES was suspended from the follow of legislation by the State Bar Court docket of California for earlier fraudulent carry out.  JONES was in the end disbarred in July 2022 dependent on conclusions by the State Bar Court that he experienced intentionally misappropriated money belonging to a customer in 2011 and that he experienced designed misrepresentations to the customer, to the court docket, and to others.

*                *                *

JONES, 48, of San Marino, California, pled guilty on November 1, 2021, to a single count of wire fraud.  He was sentenced now to 5 and a half decades in jail, three decades of supervised release, forfeiture of $8,679,787.66, and restitution to his victims in an volume to be determined in the next 90 days.  

Mr. Williams praised the excellent function of the Federal Bureau of Investigation.

This circumstance is getting managed by the Office’s Complicated Frauds and Cybercrime Device.  Assistant U.S. Attorneys David Raymond Lewis and David M. Abramowicz are in cost of the prosecution.

Next Post

UK business law predictions for 2023 - Osborne Clarke

Prediction can be a fool’s game; it is unlikely anyone thought there would be four chancellors and three prime ministers in a year. That said, these are some of the developments in UK business law which our expert team of Knowledge Lawyers expect in 2023.  General With opinion polls continuing […]
UK business law predictions for 2023 – Osborne Clarke

You May Like