FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
SEPTEMBER 14, 2007
FOR IMMEDIATE RELEASE
FORMER EMPLOYEE SENTENCED TO OVER TWO YEARS FOR DEFRAUDING
INVESTORS AND COLUMBIA, MARYLAND ACCOUNTING FIRM
Fraudulently Obtained $450,000 from Firm, Partners and Clients,
and Church Acquaintances
Baltimore, Maryland - U.S. District Judge Catherine C. Blake sentenced John R. Ring, Jr., age 26, of Bluffton, South Carolina, formerly of Ellicott City, Maryland, today to 27 months in prison, followed by three years of supervised release, for wire fraud in connection with a scheme to defraud investors and his uncle’s accounting firm, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
“This case demonstrates how important it is for investors to do their own independent research before trusting anyone with their money. John Ring took money from investors under false pretenses, used it for his own purposes and created false investment reports to convince the victims that the money was safe,” said U.S. Attorney Rod J. Rosenstein.
According to the plea agreement, Ring was an accountant at an accounting firm headquartered in Columbia, Maryland (the Firm). One of the two partners of the Firm is Ring’s uncle. From November 2005 to July 2006 Ring defrauded several clients of the Firm, acquaintances through his church, and others (collectively, the Investors), as well as the Firm and its partners, of approximately $450,000.
Ring falsely represented to the Investors that they could invest in Old Bay Investments, LLC, a company formed by the Firm’s partners to purchase real estate in South Carolina, despite knowing that the Firm’s partners were not opening Old Bay Investments to other investors. He collected approximately $408,000 from the Investors by instructing them to wire transfer funds to a bank account Ring managed for the Firm, and by obtaining investment checks, several of which he altered in order to deposit into a bank account he controlled. Ring falsely represented that these funds had been used to purchase real estate in South Carolina and provided some investors with false balance sheets, profit-loss statements, analyses of partner accounts and other records purporting to reflect that they were partners in Old Bay Investments and had earned substantial returns on their investments. Ring also provided similar false documents to other investors in an effort to lead them to believe that they were partners in an investment vehicle called OB Enterprises, LLC, when in fact Ring had not established any such company.
Ring also diverted investor funds to pay for accounting fees incurred by one of the Firm’s clients, an individual for whom Ring performed services, and provided that individual, as well as the individual’s business and creditors, with funds from the Investors and the Firm. Ring diverted funds from the Firm’s operating account into the bank account he controlled; diverted investor funds to a business owned by another investor, claiming that the money was a loan Ring had obtained from a bank; and provided funds from the Firm and the Investors to two organizations, claiming they were charitable donations.
United States Attorney Rod J. Rosenstein praised the Federal Bureau of Investigation for its investigative work, and thanked Assistant U.S. Attorneys Jonathan Biran and Harry M. Gruber, who prosecuted the case.