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KANSAS LAWYER GUILTY IN EAST TEXAS PONZI SCHEME
BEAUMONT, Texas – A 62-year-old Leawood, Kansas lawyer has pleaded guilty to investment fraud in the Eastern District of Texas announced U.S. Attorney John M. Bales today.
Clifford R. Roth pleaded guilty to an Information charging him with interstate transportation of money taken by fraud today before U.S. District Judge Marcia Crone.
According to information presented in court, in November 2007, Roth, an attorney licensed in Kansas, traveled to Beaumont and solicited investors to participate in the purchase of bank holding company stock to be used for the purchase of an Oklahoma bank which would then open a branch office in Beaumont. Roth made representations to potential investors that their stock investment would be held in an escrow account until the bank purchase was made or retained only for purposes of the bank purchase and would be returned to investors with accrued interest if the purchase was not made. Based upon these representations, from November 2007 to April 2008, dozens of investors from Beaumont, Port Arthur, Houston and surrounding areas made numerous wire transfers of investment and retirement funds totaling almost $2.5 million from the Texas area to a title company controlled by Roth in the Kansas City area. The FBI determined that the investor funds were actually used to pay numerous personal expenses of Roth's, as well as the repayment of various investors who had previously made investments with Roth unrelated to the bank acquisition, in effect, a Ponzi scheme. The acquisition of the bank never occurred.
Roth remains released on bond and other conditions of release. He faces up to 10 years in federal prison. A sentencing date has not been set.
This case is being investigated by the Beaumont, Texas and Kansas City, Kansas FBI offices and is being prosecuted by Assistant U.S. Attorney Robert L. Rawls.
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