Two Men Convicted of Operating Multimillion Dollar Advance Fee Fraud Scheme
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 on September 29, 2015, a federal jury in New Haven found DAVID C. JACKSON, also known as “C. David Manns,” “Charles Jackson” and “Andrew D. Smithson,” 53, and ALEXANDER D. HURT, also known as Alex Hurt and “Alex Dante,” 45, guilty of conspiracy and wire fraud related to an advance fee fraud scheme they conducted that defrauded more than 40 individuals out of more than $4.5 million.
On December 22, 2014, a federal grand jury returned an 11-count indictment charging JACKSON, formerly of Maryland, Ohio and Pennsylvania, and HURT, of Scottsdale, Arizona, 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. The trial before U.S. District Judge Janet Bond Arterton began on September 9, 2015, and the jury returned a verdict of guilty on all counts after deliberating for approximately three hours.
“This was a sophisticated advanced fee scheme operated across numerous states that preyed on more than 40 victims, including Connecticut citizens and businesses,” said U.S. Attorney Daly. “These defendants and their co-conspirators took advantage of individuals and business owners who had limited options in acquiring business loans in the difficult financial environment that existed after the recession of 2008. The hard-working small business owners, developers and even family farmers who were victimized by these defendants when all they wanted to do was to get funding to create, expand, or operate their businesses. Moreover, as part of the scheme, Mr. Jackson used multiple identities to conceal his criminal past and thwart background checks. Those seeking business loans need to be wary of any provider of funding that requires significant fees in advance – especially those who use the internet to prey upon trusting people who are unable to verify the representations made.”
“Driven by greed, and through lies, deceit, and deception, Mr. Hurt and Mr. Jackson took advantage of unsuspecting individuals and stole millions of dollars so they could line their own pockets and, in the case of Mr. Hurt, travel to numerous countries on four continents,” said FBI Special Agent in Charge Ferrick. “The false representations and empty promises that were made to the victims in this case were not worth the paper the fraudulent loan documents were printed on. The FBI will continue to vigorously pursue and bring to justice those who would operate advance fee fraud schemes.”
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 previously convicted 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
Judge Arterton scheduled a forfeiture hearing for October 27, 2015, during which the government will seek an order of forfeiture ordering the defendants to forfeit all proceeds traceable to the scheme. Judge Arterton will schedule sentencing after the forfeiture hearing.
The charges of conspiracy to commit wire fraud and wire fraud carry a maximum term of imprisonment of 20 years on each count, and the charge of making a false statement to federal law enforcement carries a maximum term of imprisonment of five years.
JACKSON has been detained since his arrest on August 26, 2014. HURT is released on bond under the supervision of the U.S. Probation Office.
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.