FEDERAL JURY CONVICTS AMARILLO WOMAN ON CONSPIRACY, WIRE FRAUD AND MONEY LAUNDERING CHARGES
Defendant and Her Son Defrauded Investors of More than $600,000
AMARILLO, Texas — Late Friday, Aug. 19, a jury convicted Amarillo resident, Janice Edwina Demmitt, 60, on a majority of the federal felony offenses charged in a 27-count indictment returned against Demmitt and her son, Timothy Fry, in June 2011, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Specifically, the jury convicted Demmitt on one count of conspiracy to commit money laundering, eight counts of wire fraud and 11 counts of money laundering. Fry, 33, pleaded guilty last month to one count of money laundering. Both Demmitt and Fry remain on bond; they will be sentenced in October.
The government presented evidence at trial that between 2006 and 2009, Demmitt and her son ran an insurance agency in Amarillo, and as part of their business, as registered agents of Allianz Life Insurance Company of North America, they sold annuities to investors. The majority of their clients were elderly investors.
Demmitt and Fry represented to their clients that Allianz would match each investment they made, up to $100,000, and encouraged their investors to either cash-in or borrow against their existing Allianz annuities and use those proceeds to reinvest to take advantage of the “matching” funds. However, instead of reinvesting their funds as they told their clients they would do, Demmitt and Fry deposited the funds into their personal accounts. In fact, evidence presented showed that they tricked their investors with the promise of the matching investment money so that the clients would liquidate their legitimate investment accounts. More than $600,000 in client funds was transferred into Demmitt’s and Fry’s personal accounts.
“The role of IRS-Criminal Investigation becomes even more important in fraud cases due to the complex financial transactions that can take time to unravel,” said Madie Branch, Acting Special Agent in Charge, Dallas Field Office. “As we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer the financial harm. To make the best choice, individuals should be just as careful in choosing their investment advisers as they would in choosing a doctor or a lawyer.”
The conspiracy count and each of the money laundering counts carry a maximum statutory sentence of 20 years in prison and a $250,000 fine. Each of the wire fraud counts carries a maximum statutory sentence of 10 years in prison and a $250,000 fine. Restitution could also be ordered.
The case was investigated by IRS-Criminal Investigation. Assistant U.S. Attorneys Christy Drake and Vicki Lamberson of the U.S. Attorney’s Office in Amarillo are in charge of the prosecution.
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