Final Defendant Pleads Guilty To Wire Fraud And Money Laundering As Part Of A $5 Million Ponzi Scheme
DENVER – Stanley W. Anderson, age 69, of Arvada, Colorado pled guilty before U.S. District Court Judge Christine M. Arguello late last week to one count of wire fraud and one count of money laundering, federal law enforcement announced. Anderson, who is free on bond, is scheduled to be sentenced by Judge Arguello on May 6, 2014. Anderson was indicted by a federal grand jury in Denver on March 22, 2012, along with co-defendants Pastor Charles Lawrence Kennedy, Jr. of Tampa, Florida and Edwin Alexander Smith of Denver, Colorado. Kennedy and Smith pled guilty and were sentenced to twelve and thirty months, respectively, to federal prison.
According to the facts contained in the indictment as well as the stipulated facts contained in the various plea agreements, beginning in October of 2005 and continuing through December 2008, Anderson, Smith and Kennedy together with each other, and aiding and abetting other persons known and unknown to the Grand Jury, devised a scheme to defraud investors.
Anderson and Smith resided in Colorado and conducted business through “CFO-5, LLC” and “Trinity International Enterprises, Inc”, two companies they controlled. Trinity had no business operations apart from soliciting investment funds related to an investment program. Anderson was the chairman and chief executive officer of CFO-5 and Trinity. Smith was the secretary of CFO-5 and president of Trinity. Kennedy resided in Florida where he worked as a pastor and conducted business through a company identified as “Keys to Life Corporation". Kennedy through a formal partnership with Trinity assisted Anderson and Smith in soliciting investment funds.
They solicited investors' funds for use in an investment program where significant profits would supposedly be generated through the trading of European medium term notes ("MTN program"), when in fact, the MTN program did not exist. Furthermore, they represented that their MTN program would pay nearly immediate returns in amounts ranging from 200 to 1000 percent.
They raised approximately $5 million dollars from approximately 100 investors nationwide over the course of the scheme. The investors' funds were not used to trade in financial instruments, but were instead misappropriated by Anderson, Smith and Kennedy for unauthorized uses. Investors, with the exception of those who received Ponzi scheme-like payments, that is, money taken from one investor to compensate another, lost their total investments. Anderson and Smith generally commingled and deposited investors' funds into bank accounts controlled by Anderson and Smith.
Anderson was the lead person for the investment program and managed the daily operations of the program, made key decisions as it related to the use of investor funds, handled investor communications, and oversaw the relationship with various promoters responsible for soliciting investors. During periodic conference calls with investors, Anderson conducted such calls and provided investors with purported updates. Similarly, Anderson would typically author and distribute e-mail communications to investors in which false information regarding the status of the investment was contained. As it related to the handling of funds collected by investors, Anderson typically controlled and determined the expenditure of such funds. He diverted thousands of dollars in investor funds for personal use including, house payments, meals and entertainment, personal judgments and salary payments for his children.
This case was investigated by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection Service.
This case is being prosecuted by Assistant U.S. Attorney Timothy Neff.