Mark J. Avery indicted for $52 million dollar wire fraud and money laundering scheme
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a former Anchorage resident was charged by a federal grand jury with 5 counts of wire fraud and 9 counts of money laundering.
Mark J. Avery, 54, of San Francisco, California, has been indicted by a federal grand jury in Anchorage alleging he defrauded May Wong Smith and May Smith Trust, a trust of which he was an appointed trustee, of over $52 million dollars for personal gain.
The Ninth Circuit Court of Appeals reversed Avery’s conviction on similar charges for honest services wire fraud earlier this year after the Supreme Court ruled that the theory of honest services fraud under which Avery was previously convicted was held unconstitutional. This indictment alleges that Avery, a trustee and lawyer to the May Smith Trust, engaged in a scheme to defraud the trust and May Wong Smith. Avery held those positions from early 2002 and received yearly compensation in the amount of $600,000 in trustee fees for his role as trustee and fiduciary to these trusts. Avery was also owner/operator of Avery and Associates, L.L.C., Security Aviation, Inc., and Regional Protective Services, L.L.C., located at 3230 C Street, Anchorage, Alaska. Avery’s companies, many of which were created after receipt of trust funds, were engaged in air charter services, aeromedical evacuation, legal services, development of real property, and court imposed electronic monitoring.
According to the indictment, May Wong Smith was born in China in 1922 and shortly after World War II; May Wong Smith married Stanley Smith, a citizen of Australia. Stanley Smith amassed millions of dollars from post-war business investments and became a quiet benefactor of various charitable organizations. Stanley Smith died in 1968 and May Wong Smith never remarried.
The May Smith Trust, the trust Avery is charged with defrauding, was established on October 10, 1982, to provide for May Wong Smiths support and maintenance during her life and certain charitable purposes after her death. May Wong Smith was a trustee of her own trust since inception.
In the early 1980's, May Wong Smith began to show signs of dementia. From that time, her mental condition began to deteriorate to the point where she was not capable of living without assisted care. Due to her mental condition she had full time live-in care from at least 1991 until her death in Nassau, Bahamas on July 15, 2006. In spite of her compromised mental capacity, she remained a trustee until her death in July 2006.
The Indictment alleges that Avery engaged in a scheme that involved pledged assets of the May Smith Trust as collateral for a $50 million dollar loan made to Avery.
Avery is charged with defrauding May Wong Smith and the May Smith Trust by using the $50 million loan funds for his personal use with no written business plan, and, among other things, no controls over how the money was to be spent or repaid. Avery is also charged with laundering the proceeds of the fraud funds obtained from the pledging of assets from the May Smith Trust not only to create and purchase businesses, but to pay off two home mortgages, personal debt, and to purchase property for his personal benefit. Some of the property included, real property, two World War II era fighters, a P-51D Mustang, and an F4U-4 Corsair. Other purchases included, other antique aircraft, a 47' Carver Yacht, a 37' heavy-duty patrol boat, all-terrain vehicles, motor homes and snow machines. Avery is charged with titling these assets either in his business or in his own name. The indictment further alleges that none of the assets or scheme resulted in any benefit to the May Smith Trust or May Wong Smith.
The Federal Bureau of Investigation, and the Internal Revenue Service, Criminal Investigation Division conducted the investigation leading to the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.