Danville Man Pleads Guilty To Fiduciary Fraud Scheme
SAN JOSE – Leo Joshua Kennedy pleaded guilty in federal court in San Jose today to committing wire fraud, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
In pleading guilty, Kennedy admitted to fraudulently transferring money out of Backhouse Fiduciary Services trust accounts. Kennedy worked as an accountant at Backhouse Fiduciary Services, a San Jose-based company engaged in the business of administering beneficiary trust accounts. Kennedy further admitted to having stolen an amount of money between $7 million and $20 million from various beneficiary trust accounts at Backhouse Fiduciary Services. Kennedy made these illegal transfers without account-holders? permission and used the funds to pay for his personal investments and living expenses.
Kennedy, 62 of Danville, was indicted by a federal Grand Jury on October 31, 2012. He was charged with ten counts of wire fraud in violation of 18 United States Code Section 1343. Under the plea agreement, Kennedy pled guilty to one count of wire fraud.
Kennedy is currently released on bond. Bail was set in the amount of $50,000.
Kennedy’s sentencing hearing is scheduled for August 20, 2014 before The Honorable Lucy Koh, U.S. District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of wire fraud in violation of 18 United States Code Section 1343 is 20 years imprisonment and a fine of $250,000, plus restitution in the amount of $13,787,151. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.