Nigerian National Convicted in Federal Court of Conspiracy to Launder Proceeds of Internet Fraud Schemes
WILMINGTON, Del. – David C. Weiss, United States Attorney for the District of Delaware, announced today that Donald Rice, formerly of Middletown, was sentenced on May 29, 2018, by Chief U. S. District Court Judge Leonard P. Stark to 48 months imprisonment.
The sentencing came after Mr. Rice pleaded guilty on October 26, 2017 to two counts of wire fraud and one count of making false statements on tax returns.
In December 2012, Mr. Rice became the trustee for a trust established to liquidate the assets of a closely-held investment company. As part of the trust plan, Mr. Rice was responsible for maintaining the funds set aside to cover the anticipated taxes associated with the dissolution of the company. Instead, between January 2013 and January 2015, Mr. Rice diverted approximately $3 million into his personal accounts through a series of wire transfers and the deposit of a cashier’s check. Mr. Rice then used this money for personal expenses, including the acquisition of several tax preparation franchises, a down payment on a new home, jewelry and a luxury vehicle. Federal law requires that all income, whether obtained legally or illegally be declared on tax returns. However, Mr. Rice failed to report the proceeds of his fraud on his tax return for 2013.
Mr. Rice also perpetrated a fraud against an elderly widow, and, after her death, her estate. While assisting this client with her “estate planning” in August 2011, Mr. Rice gained signature authority over her bank accounts and became executor of her estate. Following her death in March 2012, Mr. Rice wrote a series of checks to himself and his related business account, and liquidated a certificate of deposit for his personal use. In addition, Mr. Rice failed to notify a public pension system of his client’s death and continued to collect and spend her pension payments until October 2013, approximately 18 months after her death. Through these actions Mr. Rice stole additional funds totaling approximately $120,000.
U.S. Attorney Weiss stated, “The defendant preyed upon people who placed their trust in him, victimizing companies and vulnerable senior citizens alike. His actions were unconscionable. Individuals like Mr. Rice who take advantage their positions and of vulnerable members of society should understand that their conduct will be uncovered and will be met with serious consequences. The sentence the Court imposed on Mr. Rice should send a clear signal to those thinking about abusing positions of trust and power.”
The case was investigated by the Internal Revenue Service Criminal Investigation and the FBI. It was prosecuted by Assistant U.S. Attorney Lesley Wolf. U.S. Attorney Weiss thanked the investigators for their excellent work in pursuing this investigation.