United States Attorney Anne M. Tompkins
Western District of North Carolina
Jerry D. Guess Operated $1.76 Million Advanced Fee Loan Fraud Scheme
U.S. Attorney Tompkins is joined in making today’s announcement by Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Jeannine Hammett, Special Agent in Charge of Internal Revenue Service, Criminal Investigation Division.
U.S. District Court Judge Max. O. Cogburn, Jr. also ordered Guess, to pay restitution of $2,371,401 to four victims of the scheme and to the Internal Revenue Service.
A criminal bill of indictment filed in June 2010 charged Guess with wire fraud, money laundering, and filing false tax returns. Guess pleaded guilty to the wire fraud and tax charges in October 2011. According to the indictment, beginning in 2007 and continuing until 2010, Guess and others engaged in a scheme operating in Charlotte to defraud businesses and individuals located throughout the country. According to filed documents and court proceedings, Guess operated an internet website for “Ligna Acquisition Group, LLP” (“Ligna”), that advertised Ligna as a sophisticated private equity firm and direct lender routinely making loans of between $25 million and $1 billion to companies in need of private financing. Filed documents indicate that the website fraudulently stated that Guess had personally facilitated closing transactions worth more than $1 billion during his career and that Guess had access to millions of dollars of investment capital. Potential victims, documents show, were referred to Guess by third-party brokerage companies and were in search of large scale financing for a variety of business projects. According to court records, Guess used “letters of intent” to provide information to his victims regarding amounts of money Ligna would lend, the interest rate, the loan value ratio, the time period for the loan’s closing, and the amount of Ligna’s fee (generally a percentage of the total amount of a loan and payment). These letters of intent generally directed the victims to remit the initial fee to an entity described as Ligna’s “designated escrow agents.”
According to court documents, Guess exerted dominion and control over the funds in the purported “escrow” accounts into which the initial fees were directed and utilized the funds deposited into these accounts for his personal benefit. Based on court records, Guess made transfers in excess of $500,000 into personal and nominee bank accounts, purchased three luxury Mercedes Benz vehicles totaling approximately $104,000, purchased a 5.89 total carat weight diamond engagement band worth approximately $93,000, and maintained a personal 24-hour security detail at a cost of approximately $425,000.
Certain victims of Guess are described in the indictment as having businesses based in New York, Arizona, and Texas. According to court documents, Guess, though transmitting “commitment letters” to his victims that Ligna would provide the loans, never intended to provide any loans to the victims. Court records show that Guess met with victims to purportedly review their business projects and plans. He traveled to these meetings in private planes and limousines operated by private security guards, only to turn around and use the advanced fees obtained from his victims to pay for, among other things, the expenses related to his travel, court records show. Guess falsely advised the victims that, for a variety of reasons, their loans did not close. The victims requested refunds of their advanced fees, but the funds were never paid back, court documents indicate.
U.S. Attorney Tompkins stated that, “Jerry Guess devastated the hopes and dreams of his victims, all of whom were seeking loans for projects that would have created jobs and helped their communities. The defendant’s profligate spending of victim money to fund his personal lifestyle is a small measure of the depravity of his crime. As the outcome of this case makes clear, my Office will vigorously pursue those who engage in these kinds of schemes.”
“At its most basic level, this is a case about greed and the abuse of trust. Jerry Guess had no regard for the victims he betrayed, he only cared to line his own pockets. Now he will be held accountable for his actions because of the agents and prosecutors who worked so diligently to bring him to justice,” said Roger A. Coe, Acting Special Agent in Charge of the Charlotte Division of the FBI.
“Prosecuting people who violate our tax laws is how we defend the integrity of our tax system and protect the vast majority of honest, tax-paying Americans from those who would otherwise leave them to pick up the tab,” stated Special Agent in Charge Jeannine A. Hammett, IRS-Criminal Investigation.
Guess has been in federal custody since his arrest in January 2011 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The case was investigated by the FBI and IRS Criminal Investigation Division, and the prosecution was handled by Assistant U.S. Attorneys Mark T. Odulio and Jenny G. Sugar of the Western District of North Carolina.