Monday, March 10, 2014
HONOLULU – Justin Wade Smith, age 32, formerly of Hilo, was sentenced to 87 months in federal prison on March 10, 2014 for engaging in an “advance fee” fraud scheme that netted him more than $1.2 million, and failing to file income tax returns.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that, according to information presented in court, Smith earlier pled guilty to two counts of wire fraud, based on his solicitation of money from others through false representations. Smith’s false statements included telling others that (1) he would inherit money from a sizable family trust, once he paid certain fees and costs, and (2) he was a contractor for a law enforcement agency, and could generate large fees through drug seizures. In court proceedings, Smith admitted asking people to “advance” money to him, and promising to repay the amounts with substantial interest once he obtained money from the family trust or law enforcement agency. Smith admitted that he was not an heir to a large trust, or a law enforcement contractor, and that he used the money received from others to support his own lifestyle.
According to the court documents, Smith ran his scheme from 2006 through 2012 in Hawaii and elsewhere, and obtained more than $1.2 million in cash, Western Union or Moneygram wire transfers, and the “loading” of a prepaid debit card belonging to Smith.
During court proceedings, Smith also pled guilty to willfully failing to file a tax return for the calendar year 2012, during which he received approximately $233,995 from his wire fraud scheme. Under the plea agreement, Smith admitted failing to report total income of $1,024,196 between 2007- 2012, and that the resulting tax liability was $185,386.
At sentencing, United States District Judge J. Michael Seabright imposed a term of incarceration of 87 months on the wire fraud counts, and 12 months on the failure to file offense, with the terms to run concurrently. Judge Seabright also ordered Smith to pay restitution of $1,262,930 to the 33 victims of his wire fraud scheme, and to pay back taxes of $185,386 to the Internal Revenue Service.
Smith has been in custody since his arrest on August 22, 2013.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service -- Criminal Investigation, with the assistance of the Hawaii County Police Department. The prosecution was handled by Assistant United States Attorney Larry Tong.