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Investment Fraud

In 2014, the US Attorney’s Office in Minnesota charged 14 investment advisor fraud cases, which is a startling number when you consider that each investment advisor exploits potentially dozens of victims and reaps millions of dollars.

Each case has striking similarities: a purported investment advisor meets people in church or in another community setting, wins their trust and promises to invest their money wisely. And then he spends the money on himself and the victims are left with nothing.

In each case, many millions of dollars are lost before law enforcement catches up with the advisor, and the victims, many of whom are elderly, have lost their life savings.

In April 2015, this office announced a task force comprised of regulatory and law enforcement agencies who are working together to share information and resources to bring potential cases for federal prosecution.

Our collaboration is developing effective tools to shut down investment fraud before it gets out of hand by launching early warning and rapid response partnerships. Rapid response to fraud means that we are more likely to preserve assets that victims often lose in these cases. In addition to conducting semi-annual trainings for law enforcement and industry partners, we are working more efficiently by coordinating civil and criminal analysis of FinCEN suspicious activity reports (SARs).

The Investment Fraud Task Force is comprised of the U.S. Attorney’s Office for the District of Minnesota, Minnesota Department of Commerce, Securities and Exchange Commission, Internal Revenue Service – Criminal Investigation Division, U.S. Postal Inspection Service, Federal Bureau of Investigation, and others.

Some of the cases we have successfully prosecuted include:

  • Dennis Helmer operated two businesses engaged in appraising, buying, selling, and trading of coins and precious metals. He used his businesses to coax elderly victims in to send him money, coins, and precious metals, based on his false promises to provide money or coins in return. Instead, Helmer stole over $1.3 million, leaving many of his victims in financial ruin. He was sentenced on July 7, 2015, to more than 12 years in prison for defrauding his unsuspecting victims.
  • Sean Meadows operated a Ponzi scheme that defrauded more than $13 million in retirement savings from more than 100 victims. He acted as a financial advisor, going to his victims’ weddings, making house calls and promising big financial returns, when in reality the victims’ investments went towards paying off other investors and supporting his lavish lifestyle. Meadows was sentenced on June 26, 2015, to 25 years in prison.
  • Roger Goetz, formerly a certified public accountant, defrauded his clients out of nearly $1.6 million. When Goetz was hired to file estate taxes for two clients, he stole the money and left his victims with no knowledge of their outstanding debts. Goetz stole money from at least nine other victims after he lied to them about investments in his own business and in an assisted living facility. Goetz was sentenced on June 3, 2015, to 54 months in prison.
  • Tyrone Herman operated an investment fraud scheme in which he told potential victims that he had business relationships with manufacturers and wholesalers of small appliances from whom he could purchase small appliances and other inventory at below-retail market rates. Herman created false invoices to convince investors he could purchase small appliances at below-market prices and resell them for a profit of 35 percent. Herman promised investors a return of 30 percent within 90 days of investing. He stole more than $19 million. Herman was sentenced on May 26, 2015, to 10 years in prison.

Additional resources on investment fraud:

http://www.stopfraud.gov/

http://www.sec.gov/

http://mn.gov/commerce/

http://www.irs.gov/uac/Compliance-&-Enforcement

https://postalinspectors.uspis.gov/

https://www.fbi.gov/

 

Updated September 22, 2015

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