Press Release
Contact:
Nils Kessler
ASSISTANT U.S. ATTORNEY
PHONE: (616) 456-2406
FORMER STOCKBROKER SENTENCED FOR
CONSPIRACY TO COMMIT SECURITIES FRAUD
Wednesday, July 15, 2009 -
Grand Rapids, Michigan – Charles Richard Coppess, 64, of Lansing, Michigan was
sentenced to 30 months in prison, followed by two years of supervised release, announced U.S.
Attorney Donald A. Davis today. U.S. District Judge Robert Holmes Bell also ordered Coppess
to pay $1,238,900 in restitution to his victims. The sentence was imposed as the result of guilty
plea the defendant entered on March 25, 2009, to an indictment charging him with conspiracy to
commit securities fraud, wire fraud and mail fraud.
According to court records, Coppess was hired by co-conspirators Eric Riley Merkle and Jay Vernon Merkle to raise money for their fraudulent investment companies. The Merkle brothers promised returns of up to 300%, and told investors that their money would be used for oil and gas exploration in Oklahoma. Instead, the Merkle brothers lost the money investing in a series of get-rich-quick scams in the U.S., Nigeria, and other countries. The Merkle brothers also used money from new investors to pay supposed oil “profits” to earlier investors, creating the illusion of a profitable company and concealing their insolvency.
Coppess used his contacts in the community to solicit substantial sums of money from victims, including elderly retirees. He did not disclose to these investors that the Merkle brothers were paying him a $100,000 annual salary to pitch their "investment opportunity." Coppess used his specialized financial knowledge to convert victims Individual Retirement Accounts into non-traditional self-directed funds that could be invested in the scheme. In many instances, the victims lost their entire life savings.
By March of 2006, Coppess knew that the Merkle brothers were using new investor money to pay earlier investors. Coppess nevertheless continued to raise money from new investors without telling them the scheme was fraudulent, in part because he hoped to recoup his own investment. When investors became concerned and wanted to withdraw their money, Coppess falsely told them repayment was being blocked by the Department of Homeland Security and other government agencies, as well as the actions of various foreign banks and government officials. Coppess also dissuaded investors from cooperating with the FBI, implying that complaints would jeopardize or slow down the process of repayment.
In pronouncing sentence, the Court noted the violation of trust perpetrated upon the victims, particularly in light of Coppess’s experience as a licensed securities broker. “When something seems too good to be true, it probably is,” said U.S. Attorney Davis, “stealing investors money through fraud and deceit will not be tolerated.”
U.S. Attorney Davis praised the hard work of the FBI and the U.S. Postal Inspection Service in bringing this case to a successful conclusion. The case was prosecuted by Assistant U.S. Attorney Nils R. Kessler.
END
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