Former Investment Advisor Pleads Guilty to $16 Million Mail Fraud, Money Laundering Scheme
Peoria, Ill. – A former Urbana, Ill., investment advisor, Timothy J. Roth, 56, currently of Stonington, Ill., appeared this morning in federal court in Peoria, where he waived indictment and pled guilty to an information charging him with engaging in a fraud scheme that resulted in victim losses of approximately $16 million. During today’s hearing, before Senior U.S. District Judge Michael M. Mihm, Roth entered guilty pleas to one count each of mail fraud and money laundering. Roth admitted that from May 2004 through March 2011, he defrauded eleven victims, including companies and individual victims, of approximately $16 million.
According to court documents and statements during today’s hearing, Roth admitted that from August 2006 to March 2011, he fraudulently transferred, liquidated and removed mutual fund shares from clients’ accounts for his own personal and business use. Since June 2002, Roth had worked as a federally registered investment advisor for a capital management company in Champaign, Ill., and had also formed and operated several personal consulting companies. These companies provided software, and tracking and management programs various outside third party administrators for mutual fund option plans.
Over the years, clients developed a level of trust in Roth and, according to court documents, the level of authorizations extended to Roth increased. For example, standing client authorizations allowed clients to verbally authorize Roth to move funds, thereby removing the need for, and the inconvenience of, a written authorization to move funds.
The investigation, by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations Division; the U.S. Postal Inspection Service; the Securities Department of the Illinois Secretary of State; and, the Champaign Police Department, began with a telephone inquiry by an investment advisory company to the Champaign Police Department in March 2011. The case is being prosecuted by Assistant U.S. Attorneys David H. Hoff and Eric I. Long.
Sentencing has been scheduled on July 24, 2012. The offense of mail fraud carries a maximum statutory penalty of 20 years in prison; for engaging in money laundering, the statutory maximum penalty is 10 years in prison. The defendant may also be ordered to pay restitution to victims of the offenses.
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