Glen Burnie Man Sentenced to 18 Months in Prison for Stealing $4 Million from a Charity
A Board Member and a Former President of a Charity Used Their Positions to Cause the Charity to Fund Scholarships for American Indians, But Spent the Funds on Themselves
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced William Peters, age 64, of Glen Burnie, Maryland, today to 18 months in prison followed by three years of supervised release for conspiring to commit mail and wire fraud, and conspiring to commit money laundering. Judge Motz also entered an order that Peters forfeit and pay restitution of $4 million.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea, Peters was a board member of a charity that provided financial support to Native American communities and individuals. Peters and coconspirator Brian Brown, the former president of the charity, falsely represented that if the charity funded Charity One, Inc., a nonprofit corporation Brown created and controlled to effectuate the fraud scheme, Charity One would use the funds for scholarships for American Indians. Peters and Brown, however, intended to use the funds for their own benefit.
Peters used his board membership position to cause the charity to execute a series of endowment agreements in which the charity agreed to fund Charity One with $1 million per year for five years. Charity One purportedly agreed to maintain and invest the funds for scholarships for American Indians.
In fact, however, Peters and Brown distributed the proceeds of their fraud scheme to themselves. To do so, Peters created and controlled a corporation called August First, Inc., which he used to receive and distribute to himself $950,244 of the fraud proceeds. Brown created and controlled a corporation called Aria Inc. to receive and distribute to himself $3,011,751 of the proceeds. Peters and Brown falsely characterized the funds as consulting fees on their federal income tax returns filed for 2006 to 2009 in order to conceal the source of these funds.
Peters has agreed that the actual loss to the charity is $4 million.
Brian J. Brown, age 58, of Beaverton, Oregon previously pleaded guilty to his participation in the conspiracy and was sentenced in federal court in Oregon on May 7, 2015 to 37 months in prison.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established 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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI and IRS Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Seth D. Uram for the District of Oregon and Jefferson M. Gray for the District of Maryland, who prosecuted the case.