California Man Sentenced to Prison for Wire Fraud and Money Laundering
MISSOULA - Joseph Brent Loftis, 63, of Corona Del Mar, California, was sentenced on Friday, August 10, for multiple counts of wire fraud and money laundering. Chief U.S. District Judge Dana L. Christensen sentenced Loftis to 97 months in prison on all counts of conviction, to run concurrently, three years of supervised release and a $700 special assessment. Loftis stipulated to a forfeiture order of $1,662,749.10. Chief Judge Christensen further ordered Loftis to pay $7,831,666.55 in restitution to the victims of his crimes.
Loftis was convicted by a Montana jury in April of 2018 of five counts of wire fraud and two counts of money laundering following an eight-day trial with testimony from thirty-two government witnesses. Evidence presented at trial showed that from 2009 through 2013 Loftis solicited approximately $3 million from investors based upon false representations that he owned leases on the Blackfeet Indian Reservation. Loftis also made misrepresentations regarding the amounts of oil produced from these oil wells. Loftis also falsely represented to investors that he owned oil and gas leases in Oklahoma and Texas though Loftis had defaulted on purchase agreements for the leases.
As part of his scheme, after receiving investor funds, Loftis typically provided investors with a few checks totaling about $1000 and then stopped payments altogether. Once investors complained, Loftis provided excuses regarding disputes about ownership or issues with drilling. In some instances, Loftis offered to return the investors’ money and entered a rescission agreement for the investment. Loftis, however, failed to return the investors’ money or issued a check cancelled through a stop payment.
In 2011, Loftis took steps to complete a transaction known as reverse merger in which his shell company, Prism, would become a subsidiary of a publically traded company. Based upon Loftis’s representations that he needed capital to continue Prism’s operations until his company could receive equity in the public markets, Loftis obtained a $1.9 million bridge loan from investor funds. After Loftis received the loan proceeds, he failed to carry out the steps needed to complete the merger and kept the bridge loan proceeds while spending $190,000 of the funds on a luxury RV and other personal expenses.
Also in 2011, Loftis relocated to Texas and began soliciting funds from investors in a newly formed company Great Northern Energy. Loftis continued to misrepresent his education and denied having a criminal record despite a 1995 felony conviction for bank fraud and false statements to a financial institution.
This case was investigated by the FBI and IRS and prosecuted by Assistant United States Attorneys Chad Spraker and Adam Duerk.