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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

Wednesday, August 31, 2016

Stratos Pleads Guilty to Multimillion Dollar Fraud

Defrauded Victim of Divorce Proceeds Including Granite Bay House

SACRAMENTO, Calif. — Troy David Stratos, 50, formerly of Los Angeles pleaded guilty today to 11 counts of wire and mail fraud, two counts of money laundering, and one count of obstruction of justice, Acting U.S. Attorney Phillip A. Talbert announced.

According to the factual basis read in court today, between August 2005 and September 2007, Stratos devised and executed a scheme to defraud the victim of money and property. He told her that he was wealthy and successful, and that, among other things, he had made substantial money from oil investments. Stratos promised that he would help manage the victim’s portion of the proceeds from her recent divorce, including real property in her name and cash assets. Stratos told her that she needed to create a trust allowing Stratos to have access and control over her assets and the trust.

According to court documents, Stratos falsely represented that he would invest the divorce proceeds overseas, including in Dubai and in the United Arab Emirates, where the proceeds would earn a high rate of return. Stratos also falsely represented that he would pay for her expenses from his own money because her money was purportedly invested overseas.

Stratos admitted today that he never invested any money overseas as he promised. Instead, he diverted substantial sums of money from the trust for his own personal use. He also used portions of the money to pay the woman=s expenses, misrepresenting to her that he was spending his own money to pay for her expenses.

With respect to two money laundering counts, on January 2, 2007, and on January 26, 2007, Stratos withdrew $25,000 from Granite TN Trust Bank of America account in Granite Bay, California. The money was proceeds from his scheme to defraud the victim, and Stratos knew that these were proceeds of the fraud.

Further, with respect to the obstruction of justice count, between February 2007 and April 2007, Stratos was informed of a grand jury subpoena that his bookkeeper had received requiring the production of various financial records relating to Stratos, including documents relating to Stratos’ spending the victim’s money in casinos in Las Vegas. Stratos instructed the bookkeeper to not provide some of the records. In April 2010, the FBI executed a search warrant for a storage locker maintained by Stratos and located the records covered by the grand jury subpoena that were withheld at the direction of Stratos.

Stratos was arrested on December 20, 2011, and has been in custody since that time. On May 19, 2015, a federal jury in Sacramento found Stratos guilty of four counts of wire fraud and two counts of money laundering, in a separate scheme to defraud a financial manager in Pennsylvania of approximately $11,250,000.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Todd Pickles and Jared Dolan are prosecuting the case.

Stratos is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on all counts of conviction — from today’s guilty plea and the jury trial — on November 17, 2016. The maximum statutory penalty for mail and wire fraud is 20 years in prison and a fine of up to twice the gain or loss from the fraud for each count. The maximum statutory penalty for money laundering is 10 years in prison and a $10,000 fine or twice the value of the criminally derived property, and the maximum statutory penalty for obstruction of justice is 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

2:11-cr-537 TLN
Financial Fraud
Updated August 31, 2016