Sonoma Man Indicted For $1.6 Million Fraud Scheme
SAN FRANCISCO - A federal Indictment charging Michael Thomas Hamilton, a/k/a Thomas Smith, with 22 counts of mail fraud, wire fraud, and money laundering was unsealed today in federal court, announced United States Attorney Melinda Haag.
Hamilton, 49, of Sonoma, California, was indicted by a federal grand jury on November 19, 2013. According to the Indictment, Hamilton engaged in a scheme to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises regarding a book-selling business, Small Leaf, Hamilton claimed to own and operate. Hamilton represented to prospective investors that Small Leaf was a company engaged in the sale of “proprietary Books, etc. on Amazon.com and other internet websites” and that, for their investment, they would receive intellectual property rights for a number of “performing products of Small Leaf Inc.” By October 2013, according to the Indictment, Hamilton had solicited approximately $1,616,000 from more than 20 investors in California, Oregon, and Massachusetts.
As part of the scheme to defraud, Hamilton allegedly misrepresented that investors would earn high rates of return through the sale of books on Amazon and other platforms; that, if investors did not recoup their investment by a certain date, Small Leaf would reimburse the investor with interest of 10%; and that his book-selling business generated over one million dollars in yearly revenue. Hamilton also allegedly made periodic payments to investors, which he informed investors were royalties earned on the sale of books through Amazon. According to the Indictment, however, Hamilton’s book-selling business generated very little revenue, and most of the payments made to investors were from investments by new victims or additional investments by existing victims.
Hamilton was arrested on December 3, 2013, in Sonoma, California. He made his initial appearance in federal court in San Francisco today, when he was released on bond. Bail was set at $75,000. Hamilton’s next scheduled appearance is on December 12, 2013, at 9:30 a.m., before The Honorable Maria-Elena James, United States Magistrate Judge in San Francisco.
The maximum statutory penalty for each count of mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for each count of money laundering, in violation of 18 U.S.C. § 1956, is 20 years’ imprisonment and a fine of $500,000 or twice the value of the property involved in the transaction. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Robert S. Leach is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Mary Mallory and Rayneisha Booth. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation.
Please note, an indictment contains only allegations against a person and, as with all defendants, Michael Thomas Hamilton must be presumed innocent unless and until proven guilty.