Local Man Pleads Guilty in Nationwide Fraud Scheme
Targeting Prisoners and Their Families
A Yale, Michigan man, pleaded guilty today to mail fraud alleged in a federal indictment charging that he defrauded thousands of prisoners and their families across the country, United States Attorney Barbara McQuade announced today. McQuade was joined in the announcement by Postal Inspector in Charge E.C. Woodson, U.S. Postal Inspection Service, Detroit Division and Special Agent in Charge Erick Martinez, Internal Revenue Service, Criminal Investigation.
According to the 17-page indictment, John Wilson, age 57 of Yale, Michigan, devised and executed a scheme to defraud and to obtain more than $2.6 million from the family members and friends of defendants incarcerated across the United States. Specifically, John Wilson raised false hopes that Wilson could overturn the convictions or reduce the sentences of the inmates if their friends and family members hired Wilson’s companies.
According to the indictment, John Wilson operated three businesses in Southeastern Michigan: University Legal Services LLC (ULS), University Research Services LLC (URS), and Appellant Research Services LLC (ARS). Co-defendant, Lari Zeka was an employee of ARS and URS. ULS, URS, and ARS sent direct mailings to inmates across the country offering to conduct legal and appellate work on the inmate’s behalf. When a family member or friend telephonically contacted John Wilson or Lari Zeka, they explained that payment was required for two phases: legal research and attorney retainer. Wilson and/or Zeka promised that legal research would be provided during the first phase which would help win the inmate’s appeal. Wilson and/or Zeka promised during the second phase, the “attorney retainer” phase, that an attorney would be provided to assist in the case. These representations by Wilson and Zeka induced people across the United States to mail large amounts of money to URS and ARS, purportedly for appellate research and appellate representation when, in fact, any research provided would not assist the inmate and no attorney would ever be provided to work on the inmate’s appeal.
According to the indictment, Wilson and/or Zeka frequently used fictitious names in correspondence with the victims and both repeatedly represented themselves as attorneys or represented that attorneys were on the staff. Neither Wilson nor Zeka is licensed to practice law and no attorneys were on staff at any of the companies.
The indictment also alleges that, while Lari Zeka was employed by John Wilson, Zeka diverted funds intended for URS/ARS and clients of URS/ARS to his own prisoner appellate research and representation company, Paramount Research Group (PRG).
Co-defendant Lari Zeka of Macomb Township, Michigan, pleaded guilty in January 2012 and is awaiting sentencing.
During the scheme, John Wilson also failed to file tax his federal income tax returns for many years. As part of the plea, Wilson pleaded guilty to the federal offense of failing to file income tax returns.
United States Attorney Barbara McQuade said, “This fraud scheme preyed upon family members who were desperate to obtain help for loved ones. Not only did this scheme exploit people in need of legal services, but it also denied them access to justice.”
Inspector in Charge Woodson said, “the U.S. Postal Inspection Service is committed to ensuring that every citizen is protected from those who would use the mail to commit fraud. Exploiting the hopes of victims through the use of dishonest solicitations, as was committed in this case, will not be tolerated and will be met with undaunted investigative attention.”
IRS Special Agent Martinez said, "Income derived from any source legally or illegally is subject to federal tax."
In addition to pleading to the criminal counts, Wilson also agreed to a $2 million money judgment for the monies he obtained from the victims of their scheme. In a companion civil forfeiture lawsuit, the government has already successfully forfeited a 2003 auto trailer and two vintage Jeeps restored by Wilson with proceeds from the fraud. As part of his plea, Wilson also agreed to abandon thirteen firearms seized from his home.
Each mail fraud count to which Wilson pleaded guilty carries a maximum penalty of 20 years’ imprisonment and/or a fine of up to $250,000.00.
A sentencing hearing was set by Judge Cleland for April 11, 2013 at 2 pm.
McQuade congratulated the hard work of the inspectors at the United States Postal Service and the agents at the Criminal Investigations Division of the Internal Revenue Service for their efforts in pursuing this case.
The case is being prosecuted by Assistant U.S. Attorney Sarah Resnick Cohen and Assistant U.S. Attorney Margaret Smith. Assistant U.S. Attorney Gjon Juncaj is handling the criminal forfeiture allegations and the civil forfeiture action.