Hershey Man Sentenced To More Than 12 Years In Prison On Bankruptcy Fraud And Loan Fraud Charges
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Michael Jay Jackson, age 59, formerly of Hershey, Pennsylvania, was sentenced to 145 months’ imprisonment and three years’ supervised release by U.S. District Court Judge Sylvia H. Rambo on multiple bankruptcy fraud, wire fraud, false statement, aggravated identity theft, and money laundering charges. Judge Rambo also ordered Jackson to pay $1,567, 275 in restitution and $3,000 in special assessments.
According to United States Attorney David J. Freed, Jackson pleaded guilty on November 3, 2017, to an Indictment charging him with twelve counts of wire fraud, five counts of bankruptcy fraud, nine counts of false bankruptcy declarations, and two counts of aggravated identity theft. The Indictment alleged Jackson defrauded his creditors, the Bankruptcy Court for the Middle District of PA, and his wife by filing seven Chapter 13 and 11 bankruptcy petitions, five of which under Jackson’s name, and two under his wife’s name without her knowledge or consent. The petitions contained false information regarding Jackson’s income, assets, and employment, and were filed in order to postpone multiple Sheriff’s sales of his Hershey residence. Jackson filed the last two petitions on June 3, 2015, and January 19, 2017, under his wife’s name after the Bankruptcy Court barred Jackson from filing any further petitions for two years on May 28, 2015.
Thereafter, Jackson also pleaded guilty on March 13, 2018, to a two count Information charging him with wire fraud and money laundering. The Information alleged Jackson perpetrated a bogus business venture, loan fraud scheme between 2007 and 2017 that defrauded 22 victims out of approximately $1.7 million. According to the Information, Jackson registered a corporation by the name of INTEX Building Materials Group, Inc. (INTEX BMG) with the Pennsylvania Department of State in 2007, listing himself as the sole shareholder and Chief Executive Officer of the company. Jackson defrauded his victims by convincing them he had the backing of Brookstone Partners, a New York City capital investment company, to lend him millions of dollars to acquire companies that manufactured building products. Jackson induced his victims into giving him loans to pay for his personal expenses, including his children’s college tuition, while they awaited consummation of the deal with Brookstone. Jackson promised his victims huge returns on what were supposed to be short-term loans. Jackson also provided copies of what he claimed to be e-mails from Brookstone principals that falsely represented the INTEX BMG deal was real.
In reality, INTEX BMG was a “paper” company that did not hold any significant assets, didn’t have any paid employees, and never generated any income. In order to deceive his victims, Jackson established bogus email accounts under the assumed identities of Brookstone principals and drafted fake e-mails from them. Jackson provided his victims a variety of explanations as to why the INTEX BMG did not go “live” in order to lull them into not taking action against him. Jackson would repeatedly blame the protracted delays upon the Internal Revenue Service (IRS), the U.S. Security and Exchange Commission (SEC), various state regulators and the Canadian government. Many of the victims of Jackson’s loan fraud scheme were from Central Pennsylvania.
“Thieves and fraudsters use many different methods to separate honest citizens and businesses from their hard-earned money, most often for no other reason than simple greed,” said U.S. Attorney Freed. “The brazen fraud in this case attempted to use the legal Bankruptcy process to continue to line his own pockets. I commend the fine work of our partners at IRS-Criminal Investigations and the FBI for achieving some measure of justice for Jackson’s victims.”
"The bankruptcy system is based on debtors fully disclosing their assets and liabilities,” said Guy Ficco, Special Agent in Charge of IRS Criminal Investigation. “When someone intentionally files a petition with the bankruptcy court that contains false information, they are engaging in criminal activity. The Special Agents of IRS Criminal Investigation will continue working with our law enforcement partners on these types of cases to help preserve the integrity of the bankruptcy system."
"Michael Jay Jackson blatantly abused the bankruptcy process," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "By breaking the law in an attempt to hide, and hold on to, his assets, he's instead cost himself dearly, losing his very freedom. The FBI will continue to investigate and hold accountable those who engage in such financial fraud."
The case was investigated by the Harrisburg Offices of the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Kim Douglas Daniel prosecuted the case.
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