FOR IMMEDIATE RELEASE:
TUESDAY - May 17, 2011
OKLAHOMA MAN SENTENCED FOR SCAMMING
INVESTORS IN NORTH CAROLINA AND ELSEWHERE
RALEIGH - United States Attorney George E.B. Holding announced that in federal court today United States District Judge James C. Dever III, sentenced RONNIE D. RAINEY, 44, of Elk City, Oklahoma, to 120 months’ imprisonment followed by three years supervised release. RAINEY was also ordered to pay restitution to the victims in this case. The final restitution amount will be determined at a hearing in August, 2011.
A Criminal Information was filed on June 17, 2010 charging RAINEY with mail fraud, in violation of Title 18, United States Code, Section 1341. On July 20, 2010, RAINEY pled guilty to the charge.
Mr. Holding commented, “Today’s sentencing will not immediately make whole those individuals who suffered grave financial losses as a result of the defendant’s criminal conduct. However, this conviction will serve a measure of justice for the victims in this case, and I believe that it will serve as a stern reminder that the U.S. Attorney’s Office, in cooperation with our state and federal law enforcement partners, will aggressively investigate and prosecute these types of financial crimes.”
According to the Criminal Information, from 2003 to 2006, RAINEY solicited members of the public for investment capital. Operating as Par 5 Investors, LLC; Birdie Investors, LLC; Eagle Investors, LLC; and Double Eagle Investors, LLC; RAINEY, who was not registered to sell securities or manage funds, pooled the investors’ money and used that money to “day trade,” that is to buy and sell stocks on a daily basis in an effort to profit from the fluctuation in stock prices. He carried out this scheme using E*Trade Financial Services and Ameritrade accounts.
The Information further alleges that RAINEY told potential investors they would earn an average of 10% growth on their investment monthly and their money would be placed in an escrow account, guaranteeing no loss to the principal. RAINEY sent out fraudulent monthly statements to investors, with the majority of statements showing increases in capital balances even when the accounts were actually operating at a net loss. In January, 2006, RAINEY sent a letter to all investors informing them that their accounts would be frozen and the company would be dissolved. Approximately 65 investors lost $2.2 million in RAINEY’s investment scheme.
“Our agents tracked Mr. Rainey from Harnett County, North Carolina to Oklahoma over the course of this investigation, and we were gratified to see the end result today in federal court,” commented North Carolina Secretary of State Elaine Marshall. “Mr. Rainey showed contempt for the law and he did great financial harm tohis victims, many of whom lost large chunks of their life savings. I want to thank our federal law enforcement partners for their work to give these victims a measure of comfort in knowing that justice has been done.”
This case was investigated by the Securities Division of the North Carolina Department of the Secretary of State. Assistant United States Attorney Evan Rikhye represented the government.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.