U.S.-Swiss Dual National Sentenced to Three Years in Prison for Bank Fraud Charges Connected to Investment Fraud Scheme
Defendant Bought One-Way Ticket and Headed Overseas as Scheme Unraveled
WASHINGTON – Lawrence Paul Schmidt, aka Lawrence Schmid, 61, formerly of Washington, D.C., was sentenced today to three years in prison in connection with federal bank fraud charges related to an investment fraud scheme.
The announcement was made by U.S. Attorney Matthew M. Graves and Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division.
In addition to his term of imprisonment, the Honorable Amy Berman Jackson imposed a four-year term of supervised release, restitution in the amount of $106,775.84, and entry of a forfeiture money judgment in the amount of $106,775.84.
Schmidt was indicted in November 2018 on two counts of bank fraud, two counts of wire fraud, and six counts of engaging in monetary transactions in property derived from specified unlawful activity. He was extradited from the United Kingdom in late 2020 in connection with the federal charges and has remained in US custody since his arrest. On Sept. 29, 2021, Schmidt pleaded guilty to a bank fraud charge in the U.S. District Court for the District of Columbia.
According to the statement of offense submitted to the Court and admitted by Schmidt, beginning in 2008, Schmidt created several investment entities and related corporations, including Commercial Equity Partners, Ltd. (“CEP”) and FutureGen Company (“FGC”), through which he solicited funds. Schmidt was the sole signatory on the bank accounts for each of these entities. Between June 2008 and April 2014, Schmidt raised over $22 million in funds, which he then comingled and transferred between the various entities and to personal accounts. Schmidt knew that by January 2014, the bank accounts for the various CEP and FGC entities contained insufficient funds to meet the companies’ financial obligations. By March 2014, the approximate combined balance of all the entities’ bank accounts was just $8,600.
As a result, over a roughly four-month period in early 2014, Schmidt masterminded a scheme to defraud and attempt to defraud Bank of America and SunTrust Bank of approximately $746,885.59 in funds controlled by the banks. Specifically, using various methods, Schmidt deposited fraudulent and forged checks into investment fund bank accounts that he controlled, then transferred and used the money for, amongst other things, his own benefit and use. In doing so, according to the government’s evidence, Schmidt abused his position of private trust with the investors of the various CEP and FGC-related entities.
As the scheme continued to unravel, on April 10, 2014, Schmidt boarded a one-way flight from the United States to London, where he remained until his arrest and extradition. Prior to leaving the United States, Schmidt wrote two letters to family members in which he stated, among other things, “[a]t this point in my life I have three choices, suicide, prison more than likely or to try and start over and make right by everyone.” Thereafter, on or about July 24, 2015, in responding to a message sent to him on LinkedIn from one of his investors, Schmidt wrote, “I know the federal government would like to prosecute me and I cannot blame them.”
On June 1, 2014, the U.S. Securities and Exchange Commission (SEC) filed suit in U.S. District Court for the District of Columbia, in Civil Action No. 14-cv-1002 (CRC), against Schmidt, CEP, FutureGen, and the entities Schmidt controlled. The court entered final judgment against Schmidt on October 3, 2018, and entered final judgment against CEP, FutureGen, and the additional entities that Schmidt controlled on March 11, 2019.
This investigation was conducted by the FBI’s Washington Field Office Criminal Division. The Justice Department’s Office of International Affairs in the Department’s Criminal Division, the United States Marshals Service, and the government of the United Kingdom provided substantial assistance in securing Schmidt’s arrest and extradition. The SEC also provided substantial assistance in this investigation.
The prosecution is being handled by Assistant U.S. Attorneys Anne P. McNamara and David B. Kent of the U.S. Attorney’s Office for the District of Columbia.