FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC at 410-209-4885
August 28, 2006
FOR IMMEDIATE RELEASE
TWO INDICTED IN MAIL FRAUD AND MONEY LAUNDERING CONSPIRACY
INVOLVING FRAUDULENT INVESTMENT SCHEME
Defendants Collected More than $17 million from Investors
BALTIMORE, Maryland - A federal grand jury has indicted Joseph Poteat, age 60, of Danville, Virginia and Marie Bellamy, age 68, of Baltimore for a mail fraud and money laundering conspiracy in connection with a fraudulent investment scheme announced United States Attorney for the District of Maryland Rod J. Rosenstein. The indictment, which was returned on August 10, 2006, was sealed until the arrest of Marie Bellamy on August 21, 2006.
The six count indictment charges Poteat and Bellamy with conspiracy to commit mail fraud, mail fraud, conspiracy to commit money laundering, money laundering and also charges Marie Bellamy with making false statements. According to the indictment, Poteat controlled the CEP Group, a “private membership organization” and JLR Development, Ltd., which both operated out of an office in Danville, Virginia. Poteat represented to potential investors that JLR was an entity that invested in offshore ventures. Bellamy was a “mentor” in JLR’s investment program. In order to invest in JLR, individuals had to first join CEP by paying a membership fee of $80.
According to the indictment, Poteat and Bellamy recruited individuals from throughout the United States to join CEP, making misleading representations to the investors as to how their investment in JLR would work and the amount of return guaranteed on their investment. Poteat and Bellamy would send the investors monthly and quarterly statements containing false information about the returns the investors were earning. The defendants also encouraged investors to become “mentors” in JLR’s program and recruit others to become investors in CEP and JLR. As a mentor, an investor was supposedly entitled to receive a percentage of the earnings of the investors they recruited. In this way, Poteat and Bellamy collected over $17 million from investors.
The indictment alleges that Poteat and Bellamy diverted investor funds for their personal use and provided funds to others for purposes that did not involve any legitimate investment. The defendants also attempted to prevent investors from seeking the timely payment of the promised return on their investment, encouraging them to use those funds to “reinvest” in the JLR program. In addition, Poteat and Bellamy would send payment to some investors, using new investors’ funds, in order to lull them into believing that their investments were earning returns.
Poteat and Bellamy face a maximum penalty of 5 years in prison, followed by 3 years of supervised release and a $250,000 fine on the mail fraud conspiracy; 5 years in prison followed by 3 years of supervised release and a $250,000 fine for mail fraud; 20 years in prison followed by 5 years of supervised release and a $500,000 fine on the money laundering conspiracy and 20 years in prison, followed by 5 years of supervised release and a fine of $250,000 for money laundering. In addition, Bellamy faces a maximum penalty of 5 years in prison, followed by 3 years of supervised release and a $250,000 fine for making false statements.
Marie Bellamy was arrested and had her initial appearance on August 21, 2006. Joseph Poteat was arrested on August 27, 2006 in Danville, Virginia. He had his initial appearance today in U.S. District Court in Roanoke, Virginia. Both Poteat and Bellamy are scheduled to be arraigned in U.S. District Court in Baltimore on Friday, September 1, 2006.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the investigative work performed by the Internal Revenue Service - Criminal Investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys A. David Copperthite and Jonathan Biran, who are prosecuting the case.
This page last modifiedAugust 28, 2006