The United States Attorney's Office

MAN  SENTENCED TO 20 YEARS IN PRISON IN $32 MILLION
SCAM THAT BILKED MORE THAN 500 VICTIMS IN COAL MINES AND A SECRET GOLD TRANSACTION

A record company executive was sentenced this morning to 20 years in federal prison for his involvement in a Ponzi scheme that defrauded more than 500 investors out of more than $32 million.

Henry Jones, 54, a former Marina Del Rey resident who fled to Hong Kong in 2006, was sentenced by United States District Judge Percy Anderson. In addition to the prison term, Judge Anderson ordered Jones to pay $28 million in restitution.

During this morning’s sentencing hearing, Judge Anderson described Jones as a “financial predator” and a “professional confidence artist.”

Two other defendants convicted in the scheme – Arthur Simburg, 64, of Portland, Oregon and Robert Jennings, 59, a pastor from Perris, California – were sentenced in November 2008 to nine years and 12 years in federal prison, respectively.

Jones and Jennings were found guilty in July following a three-week jury trial. The evidence presented at trial showed that Jones, Simburg and Jennings used a company called Tri Energy to solicit investors for a coal mine venture. They also solicited investments in a highly secretive international gold transaction that purportedly involved the sale of 20,000 tons of gold from Israel to the United Arab Emirates. The defendants solicited funds largely through nightly call-in telephone conference calls in which investors were promised huge returns – as much as 300 percent within 60 days. Many of the conference calls included group prayer, and investors were told that the gold transaction was “divinely inspired” and that it was God’s will for it to come to fruition.

Despite the promises of profitable investments, Jones spent more than $21 million of the victim-investors’ money on his own extravagant personal expenses and to fund his Marina Del Rey-based music business. In addition to his music business, which featured his wife and several other women as purported R & B artists, Jones used the victim-investors’ money to purchase a house in Marina Del Rey, a condominium in Culver City, a Ferrari Spider and a Porsche Cayenne. Simburg and Jennings also used victim investor funds to support themselves. The victim-investors ultimately lost more than $28 million to Jones, Simburg and Jennings.

This case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation and IRS-Criminal Investigation. The Securities and Exchange Commission provided assistance in the investigation.

Release No. 9-044
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