Former Bishop Of Trumbull Church Sentenced To 46 Months In Prison For Investment Fraud Scheme
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JULIUS C. BLACKWELDER, 59, formerly of Stratford, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 46 months of imprisonment, followed by three years of supervised release, for operating an investment fraud scheme.
According to court documents and statements made in court, beginning in 2005, BLACKWELDER persuaded individuals to invest their money with him as part of an investment pool known as the “Friend’s Investment Group.” At the time, BLACKWELDER was the Bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints located in Trumbull, and he solicited investments from, among others, members of his congregation.
BLACKWELDER misrepresented to investors that he would invest their money in safe, long-term commodities futures contracts, and that he was an experienced and successful commodities investor. In some instances, BLACKWELDER guaranteed investors’ principal and a specific return on their investment. He documented his misrepresentations to investors in promissory notes, offering memoranda and account updates that he prepared.
In fact, BLACKWELDER used investors’ money to fund his construction of a 7,000 square-foot home on the Housatonic River in Stratford, to pay other personal expenses and to repay personal bank loans, including a line of credit from a Troubled Asset Relief Program (TARP) recipient bank. BLACKWELDER also used some invested funds to pay earlier investors.
Through this scheme, BLACKWELDER defrauded investors of nearly $500,000.
One victim of BLACKWELDER’s scheme, who was nearing retirement, took out a $100,000 home equity loan on his house and withdrew $130,000 from his 401k to invest with BLACKWELDER.
“This defendant exploited his position in his church to mislead other church members into believing he was an accomplished investor who could help them protect and increase their wealth,” stated Acting U.S. Attorney Daly. “Instead, he used much of the money he took from his victims to construct a luxurious waterfront mansion so that he could live in comfort while his victims struggled to make ends meet. I want to thank the U.S. Postal Inspection Service, SIGTARP, IRS-Criminal Investigation and the Connecticut Department of Banking who investigated this matter, as well as our other law enforcement partners who are working diligently to protect investors by identifying and rooting out fraudulent financial schemes.”
On February 20, 2013, BLACKWELDER pleaded guilty to one count of wire fraud and one count of money laundering.
This matter was investigated by the United States Postal Inspection Service, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Internal Revenue Service – Criminal Investigation, and the State of Connecticut Department of Banking. The case was prosecuted by Assistant United States Attorney Jonathan N. Francis and Acting United States Attorney Daly.
The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to firstname.lastname@example.org.
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
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