Michael James Burns, Jr. Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Missoula on June 24, 2010, before U.S. Magistrate Judge Jeremiah C. Lynch, MICHAEL JAMES BURNS, JR., a 51-year-old resident of San Francisco, California, pled guilty to wire fraud/money laundering. Sentencing has been set for October 8, 2010. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Ryan M. Archer, the government stated it would have proved at trial the following:
In the summer of 2008, BURNS initiated BMJ Capital in California to allegedly finance various business projects. In September 2008, BURNS met one of the owners of Strategic Land Company, LLC in San Francisco, California. The owner, hereafter referred to as "T.S.", was a partner and owner of Strategic Land Company, LLC (SLC) based in Lakeside. BURNS entered into negotiations with SLC and represented that he had over $100 million in assets and was interested in funding a real estate development project in Lakeside.
On October 15, 2008, BURNS entered into a signed agreement with "T.S." and SLC, promising to make a $25 million credit line available to complete the final phases of the land development project. SLC agreed to provide a 1% up front commitment fee of $250,000. Under the agreement, this advance fee was fully refundable by October 29, 2008, if the parties had not finalized their financing documents. On October 17, 2008, "T.S." directed Glacier Bank of Kalispell to wire $250,000 to BURNS' BMJ Capital bank account at Wachovia Bank in San Francisco, California.
On October 27, 2008, no credit had been extended and BURNS suggested altering the agreement where he would "buy into" the company.
In November 2008, SLC entered into the revised agreement after meeting with BURNS and his attorney in San Francisco. Under the new agreement, BURNS agreed to wire $33 million into the SLC Glacier Bank account. From November through January 2009, BURNS emailed several excuses as to why the money was never sent. Ultimately BURNS ceased contact with SLC and never provided any financing.
BURNS' attorney had previously vouched for BURNS' $100 million in assets, but later stated the document he relied on appeared as if it had or could be manipulated. One of BURNS' "employees" stated that it became clear that BURNS collected advance fees, but never provided any of the promised financing. A financial analysis of the bank records shows that BMJ Capital collected hundreds of thousands of dollars from individuals and businesses between 2007 and 2008. At the time, BURNS was on parole for a similar offense in Hawaii.
BURNS faces possible penalties of 20 years in prison, a $250,000 fine and at least 3 years supervised release.
The investigation was conducted by the Federal Bureau of Investigation.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.