Five Sentenced to Prison for Elaborate Advance-Fee Scam
PHOENIX – On March 30 and 31, 2015, U.S. District Judge Neil V. Wake sentenced five defendants to prison for stealing more than $11 million through an elaborate advance-fee scam. Judge Wake sentenced Steven Thomas Brewer of Dallas, TX, to 15 years plus eight months of imprisonment; Joel Stephen Cutulle of Middleton, MA, to nine years of imprisonment; Kenny Ray Kirby of Corinth, TX, to five years of imprisonment; Debra Ann Nickolas of Stanbury Park, UT, and formerly of Scottsdale, Ariz., to five years of imprisonment; and David P. Rachel of Mableton, GA, to three years of imprisonment. Steven Brewer, Joel Cutulle, Kenny Kirby, and David Rachel were found guilty by a federal jury on Oct. 8, 2014, of charges including criminal conspiracy, wire fraud, and money laundering. Debra Nickolas pleaded guilty on Aug. 11, 2014, to conspiracy and tax evasion.
Evidence at trial showed that the defendants stole more than $11 million by using fake companies-including Platinum Diversified Holdings (PDH) and HS&H Holdings-through which the defendants claimed they could secure loans for the victims’ business projects. At the time of the offense, Debra Nickolas lived in Scottsdale, Ariz., and two of the victims were from Arizona.
In exchange for purportedly securing the loans, the defendants demanded refundable deposits, which were supposed to be held in an attorney’s escrow account until the loans funded. In reality, the attorneys, Kenny Kirby and David Rachel, were co-conspirators who transferred the victims’ money to themselves and their co-conspirators, often within days. The victims’ money was spent on cars, luxury vacations, interior design services, tickets to sporting events, and other personal items. The scheme continued for years, with the defendants concealing the fraud by providing the victims false bank documents and other assurances to convince them that funding was imminent. The defendants never funded any business loans and the victims never received any of their money back.
The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation. The prosecution was handled by James R. Knapp and Karen S. McDonald, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-12-1927-PHX-NVW
RELEASE NUMBER: 2015-029_Nickolas et al
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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