Two Men Sentenced to Prison for Their Roles in an Investment Fraud Scheme Targeting Elderly Victims
Two men were sentenced to prison for their roles in a multimillion-dollar investment fraud scheme targeting the elderly and other vulnerable victims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina and Inspector in Charge David McGinnis of the U.S. Postal Inspection Service’s Charlotte Division made the announcement.
Robert Leslie Stencil, 62, of Charlotte, North Carolina, and Michael Allen Duke, 51, of Richardson, Texas, were each sentenced by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina. Stencil was sentenced to 135 months in prison, and was also ordered to pay $2,745,239 in restitution and to forfeit $868,317.58. Duke was sentenced to 70 months in prison, and was ordered to pay $1,635,485 in restitution.
Following a three-week trial in January 2019, Stencil and Duke were each found guilty of one count of conspiracy to commit mail and wire fraud. In addition, Stencil was found guilty of 13 counts of mail fraud, 13 counts of wire fraud and four counts of money laundering. Duke was found guilty of three counts of mail fraud, one count of wire fraud and one count of money laundering.
According to the evidence presented at trial, from 2012 through 2016, Stencil, Duke and their co-conspirators sold millions of dollars of worthless stock in a sham company named Niyato Industries Inc. (Niyato). Stencil played the role of Niyato’s chief executive officer. Duke was Stencil’s top salesperson. Together with their co-conspirators, Stencil and Duke portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas. Stencil, Duke and their co-conspirators told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities and valuable contracts. They also told victims that Niyato would use 97 percent of the money it raised selling stock to grow its business and expand operations. Stencil, Duke and their co-conspirators used high-pressure tactics when pitching Niyato stock to victims, the evidence showed. Among other things, they sold victims on the opportunity to “get in on the ground floor,” offering them a portion of a supposedly limited supply of pre-IPO stock at $.50 per share and promising them a 10- to 16-fold return when Niyato went public. From 2012 to 2016, Stencil, Duke and their co-conspirators repeatedly told victims that an IPO was imminent, the evidence showed.
In reality, Niyato had no patents, facilities, products or plans to commence an IPO. Niyato’s true business was the sale of worthless stock. Stencil, Duke and their co-conspirators used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Duke – half or nearly half of the money they solicited from each investor on behalf of Niyato. Moreover, Stencil used Niyato’s bank account as his own personal piggybank, the evidence showed.
The evidence showed that, together, Stencil, Duke and their co-conspirators sold approximately $2.8 million in stock to approximately 140 victims, many of whom were elderly or vulnerable for other reasons.
Five other defendants have pleaded guilty in this matter and have already been sentenced, namely Nicholas Fleming, 64, of Northridge, California; Martin Delaine Lewis, 53, of Frisco, Texas; Paula Saccomanno, 62, of Boca Raton, Florida; Kristian F. Sierp, 48, of Costa Rica; and Dennis Swerdlen, 65, of Boca Raton, Florida. Daniel Thomas Broyles Sr., 62, of Beverly Hills, California, was also charged and remains a fugitive. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section is prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.