United States Attorney James R. Dedrick
Eastern District of Tennessee
FOR IMMEDIATE RELEASE
Friday, April 3, 2009
EAST TENNESSEE FINANCIAL ADVISOR PLEADS GUILTY TO FRAUD AND TAX CHARGES
[Knoxville, TN] – Delbert Foster Blount, III, age 40, of Ooltewah, Tennessee, plead guilty in federal court today before Honorable Thomas W. Phillips, United States District Judge, to one count of mail fraud, one count of wire fraud, and five counts of income tax evasion. Blount faces a maximum penalty of 65 years in prison and fines of up to $1.75 million when he is sentenced on August 20, 2009.
On February 17, 2009, United States Attorney James R. Dedrick filed an Information in United States District Court charging Blount, a financial advisor, with the seven counts to which he pled guilty.
According to the filed plea agreement, from June 2000 until December 2006, Blount used his position as a financial advisor to encourage people to invest money in various savings and retirement vehicles that include, but are not limited to, 401(k) accounts, IRA accounts, and brokerage accounts, but then misappropriated the money for his person use. Blount admitted that he deposited checks received from investors into a nominee account to hide his theft. The plea agreement states that Blount then created false statements on his computer and posted them on the internet to lead his clients to believe that he had actually invested their money. If clients requested a distribution from their non-existent investments, Blount would delay them until he stole funds from other investors to deposit into the victim’s bank account.
Blount also failed to report the proceeds from the theft on his federal income tax returns he filed for 2002 through 2004, and he failed to file income tax returns for tax years 2005 and 2006. These actions resulted in a tax loss to the government of $469,592 for tax years 2002 through 2006.
According to the plea agreement, Blount stole over $1.2 million from his 26 clients and will be required to pay full restitution as ordered by the Court.
For additional information, please contact United States Attorney James R. “Russ” Dedrick, Assistant U.S. Attorney Charles E. Atchley, Jr., or Public Information Officer Sharry Dedman-Beard at 865-545-4167.