Advance Fee Fraud Scheme Operator Sentenced to More Than 17 Years in Federal Prison
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that DAVID C. JACKSON, also known as “C. David Manns,” “Charles Jackson” and “Andrew D. Smithson,” 54, was sentenced yesterday by U.S. District Judge Janet Bond Arterton in New Haven to 205 months of imprisonment, followed by three years of supervised release, for operating an advance fee fraud scheme that victimized more than 40 individuals who lost a total of more than $4.5 million.
“This sentence is entirely appropriate for this defendant who has a prior federal felony conviction and preyed upon over 40 business owners ultimately defrauding them of more than 4.5 million dollars,” said U.S. Attorney Daly. “Many of these victims were small business owners and family farmers struggling in the extremely limited financing environment that existed in the wake of the 2008 recession. “As part of his scheme, Mr. Jackson used multiple identities to conceal his criminal past and thwart background checks. His outright theft had devastating consequences to many of his victims. We urge those seeking business loans to be wary of any one who offers funding that requires significant advance fees. The public should be especially cautious of purported lenders who operate on the internet preying upon trusting individuals unable to verify the accuracy of the representations made by these lenders.”
“Driven by greed, and through lies, deceit, and deception, Mr. Jackson took advantage of unsuspecting individuals and stole millions of dollars so he could line their own pockets,” said FBI Special Agent in Charge Ferrick. “The FBI will continue to vigorously pursue and bring to justice those who would operate advance fee fraud schemes.”
On December 22, 2014, a grand jury returned an 11-count indictment charging JACKSON, formerly of Maryland, Ohio and Pennsylvania, and Alexander D. Hurt, also known as “Alex Hurt” and “Alex Dante,” of Scottsdale, Ariz., and formerly of Massachusetts, with one count of conspiracy to commit wire fraud and multiple counts of wire fraud. The indictment also charged Hurt with one count of making a false statement to federal law enforcement. On September 29, 2015, a jury returned a verdict of guilty on all counts.
According to the evidence presented during the trial, in approximately September 2009, JACKSON, using the alias “C. David Manns,” established Jalin Realty Capital Advisors, LLC, using a business address in Dayton, Ohio. In 2011, JACKSON changed the name of his business to American Capital Holdings, LLC, using business addresses in Pittsburgh, Pennsylvania. Soon after changing the business name, JACKSON began introducing himself to victim clients as “Charles Jackson” and then also used the name “Andrew Smithson” to prevent victims from learning his true identity and the true nature of his background and his scheme.
Hurt held himself out as Vice President of Brightway Financial Group, LLC, a company that used a business addresses in Grapevine, Texas. As established during the trial, Hurt used his background as a pastor with a Brockton, Massachusetts church to gain the confidence of at least one victim who lost money in the scheme.
JACKSON, Hurt and others defrauded individuals, including Connecticut residents, who wired funds to them in anticipation of receiving large business loans. The upfront fees were alternately described as “application fees,” “collateral fees” or “commitment fees.” The victims were promised a refund of the upfront fees if their loan transactions were not completed. In order to convince victim-borrowers that the loans were legitimate and Jalin and ACH had successfully secured loans in the past, JACKSON provided victims and potential victims the name and phone number of a co-conspirator and told them that they could contact her for a reference. After she was contacted, the co-conspirator falsely represented to victims and potential victims that she had, in fact, received funding from JACKSON for a construction loan, and that she had successfully done a project financed with her co-conspirator and Jalin. The reference she gave was false and was just another part of the scam.
Through this scheme, more than 40 individuals provided JACKSON and Hurt with more than $4.5 million in advance fees and funds that were to be held in escrow for business loans that were never provided. Some of the individuals received partial refunds of the advance fees they had provided, but the refunds were made using fees that had been paid by other victims in a Ponzi-like scheme. JACKSON was ordered to make full restitution.
JACKSON has been detained since his arrest on August 26, 2014.
JACKSON was previously convicted in the Western District of Pennsylvania of federal bank fraud and money laundering offenses in October 2006 and was sentenced to 41 months in prison, followed by five years of supervised release. He was released from federal prison in September 2009 and operated this advance fee fraud scheme while on supervised release.
Hurt, who is released on bond, awaits sentencing.
This matter has been investigated by the Federal Bureau of Investigation and the Ansonia Police Department, and is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Michael S. McGarry.