Debra W. Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
March 16, 2005
Thom Mrozek (213) 894-6947
Los Angeles, CA - Ending a trial that had lasted six weeks, a father-and-son fraud team pleaded guilty last week to fraud and money laundering charges in a scheme where victims were induced to transfer money into what they believed were their own bank accounts in Europe, but in reality were only conduits back to the fraudsters.
James Carroll Sexton, 64, of Cayucos, and his son, James Carroll Sexton, Jr., 26, of Las Vegas, pleaded guilty March 10 in the United States District Court in Los Angeles.
In the sixth week of trial, Sexton Jr. entered into a plea agreement with federal prosecutors. Sexton Jr. subsequently pleaded guilty to four counts of mail fraud and a conspiracy to launder money. As part of the plea agreement, Sexton Jr. also agreed to testify against his father.
Upon disclosure of the plea agreement with his son, Sexton pleaded guilty to all 19 counts in an indictment. The elder Sexton pleaded guilty to 11 counts of mail fraud, two counts of wire fraud, four counts of money laundering, and one count of conspiracy to money launder.
The trial included testimony from numerous witnesses showing that the elder Sexton told victims he would establish a "bank within a bank," or a trust account, at banks in Liechtenstein, a country near Switzerland with strict bank secrecy laws. Sexton further represented that he was an attorney, advertising what were phony credentials in a national lawyers' publication. Victims testified that they were told their money would be safe, secure and held under their sole control.
Bank records and witnesses showed that between May 1998 and February 1999 victims transferred more than $8 million to the accounts ostensibly established on their behalf by Sexton. In reality, Sexton was the sole owner and controller of the accounts. When foreign bankers began to question Sexton about the true owners of the funds, he misrepresented the source of funds and, with the assistance of Sexton Jr., withdrew the victims' funds and moved the money through various other foreign bank accounts under fictitious names and nominees in an effort to conceal and disguise ownership.
The Sextons are scheduled to be sentenced on June 13 by United States District Senior Judge Robert M. Takasugi. Sexton faces a maximum sentence of 140 years in federal prison. Sexton Jr. faces a maximum prison term of 40 years.
Liechtenstein law enforcement authorities provided extensive and prompt assistance to United States authorities and returned more than $4 million of the fraud proceeds to the U.S.
This case was investigated by the Federal Bureau of Investigation, Santa Maria Resident Agency, and IRS-Criminal Investigation Division, Santa Maria office.
Release No. 05-047
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