FORMER BISHOP OF TRUMBULL CHURCH
CHARGED WITH INVESTOR FRAUD OFFENSES
David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in Bridgeport has returned an indictment charging JULIUS C. BLACKWELDER, 59, of Utah, formerly of Stratford, with nine counts of money laundering and mail and wire fraud in connection with an alleged investor fraud scheme.
“This defendant is alleged to have abused his position of trust as a leader in his church to defraud fellow church members and others out of hundreds of thousands of dollars,” stated U.S. Attorney Fein. “I commend the U.S. Postal Inspection Service, SIGTARP, IRS-Criminal Investigation, Connecticut Department of Banking and our other law enforcement partners who are working diligently to protect investors by identifying and rooting out fraudulent financial schemes.”
Beginning in 2005, it is alleged that BLACKWELDER persuaded individuals to invest their money with him as part of an investment pool known as the “Friend’s Investment Group.” At the time, BLACKWELDER was the Bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints located in Trumbull, and he solicited investments from, among others, members of his congregation.
It is further alleged that BLACKWELDER misrepresented to investors that he would invest their money in safe, long-term commodities futures contracts, and that he was an experienced and successful commodities investor. In some instances, BLACKWELDER guaranteed investors’ principal and a specific return on their investment. BLACKWELDER documented his misrepresentations to investors in promissory notes, offering memoranda, and account updates that he prepared. In fact, BLACKWELDER used investors’ money to pay his own expenses, which included repaying earlier investors in the scheme, building a waterfront home in Stratford, and repaying personal bank loans, including a line of credit from a Troubled Asset Relief Program (TARP) recipient bank. The indictment alleges that BLACKWELDER’s fraudulent scheme led victims to lose more than $400,000.
The indictment was returned March 26, and the case has been assigned to Senior United States District Judge Ellen Bree Burns in New Haven.
If convicted, BLACKWELDER faces a maximum term of imprisonment of 20 years on each count of mail and wire fraud and 10 years on each count of money laundering.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the United States Postal Inspection Service, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Internal Revenue Service – Criminal Investigation, and the State of Connecticut Department of Banking. The case is being prosecuted by Special Assistant United States Attorney Jonathan N. Francis and Deputy United States Attorney Deirdre M. Daly.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
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