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Justice News

Department of Justice
U.S. Attorney’s Office
Central District of Illinois

FOR IMMEDIATE RELEASE
Wednesday, June 20, 2018

Florida Man Charged with Defrauding Local Investor

PEORIA, Ill. – A federal grand jury today indicted Timothy Herman, 57, of Lake Mary, Fla., of defrauding a Peoria area victim of approximately $600,000.

The indictment alleges that Herman falsely represented to the victim that he had investment opportunities that would earn greater returns than could be earned from banks. Beginning in or about 2013, Herman represented that he had been in the garbage business for several years and had been very successful. Herman did not disclose that, in fact, in May 2013, he had notified his home mortgage holder that he had not received a paycheck since May 2012 and had depleted his savings.

The indictment alleges that Herman advised the victim that he would invest funds in a “Rewards Program,” which one of his companies was developing with Republic Services, a waste management company in Arizona. Herman represented that he was going to retire in two years and expected a $17 million payout at that time.

After Herman represented the profitability and safety of the funds, the victim loaned $200,000 to Herman’s company, Delta Direct. Herman allegedly transferred the funds amongst his various business accounts before transferring the funds to his personal account. As part of the scheme, Herman used the victim’s funds to make monthly payments to the victim as provided in the promissory notes. After receiving the monthly payments, the victim loaned more money to Herman over a period of time.

Instead of investing the funds as represented, the indictment alleges that from 2013 to December 2017, Herman used the victim’s funds to make payments to the victim, to make mortgage payments, to pay tax liens, to make marital settlement payments and to otherwise use the victim’s money for his personal use and benefit.  Herman continued his deception and to conceal his fraudulent conduct, made false statements to others, including the victim and federal law enforcement agents.

The charges are the result of investigation by the FBI and the U.S. Postal Inspection Service. Supervisory Assistant U.S. Attorney Darilynn J. Knauss is prosecuting the case.

The U.S. Clerk of the Court will schedule a date for Herman to appear for arraignment in federal court in Peoria.

If convicted, the statutory maximum penalty for each count of mail fraud (four counts) and wire fraud (nine counts) is 20 years in prison, and a fine of up to $250,000; for making a false statement, the maximum penalty is five years in prison. 

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.

Topic(s): 
Financial Fraud
Updated June 20, 2018