Cleveland man sentenced to federal prison for defrauding investors of more than $1 million
GAINESVILLE, Ga. - Elmer Swain Stewart was sentenced to federal prison on charges that he defrauded 18 individuals of more than $1 million after he persuaded them to invest their retirement savings in tracts of timber land.
“Stewart’s victims trusted him with much of their retirement savings and gave him thousands of dollars to invest,” said U.S. Attorney Byung J. “BJay” Pak. “In return, this greedy defendant stole from his investors and used their money to fund his lavish lifestyle.”
“Instead of living comfortably off their well-earned retirement investments, Stewart’s greed has caused these victims to worry about their future well-being,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “The sentencing of Stewart will not make these victims whole again, but hopefully it sends a message that the FBI will continue to make it a priority to root out and punish anyone who preys on investors for their own selfish desires.”
According to U.S. Attorney Pak, the charges and other information presented in court: Stewart represented to potential investors that he was aware of tracts of land in Georgia and other states that had large timber stands that were available to harvest at auction to the highest bidder. Stewart told investors that he would give them the opportunity to invest with him in bidding on these timber tracts. Stewart told the investors they would need to give him earnest money or a down payment for the bid. If they won the bid, Stewart would then re-sell the timber rights for a profit or arrange to harvest the timber on the land for a profit. Stewart claimed that if he did not win the bid, the investors’ money would be returned. None of the investors received written confirmation or documentation that the bids were submitted or that the bids were accepted.
Stewart’s representations that he would use his investors’ money as earnest money or down payments on timber bids were fraudulent. Instead, Stewart used the investors’ money to pay for a lavish lifestyle for himself that he could not otherwise afford. Stewart lived on a horse farm valued at $1.5 million that he falsely claimed he owned. The investors’ money was used to pay rent on the property and for basic living expenses. He also used the money for trips to Alaska, Hawaii, and other places.
When investors demanded Stewart return their money, the defendant falsely told the investors that he had rolled the money over into another timber bid or that their money had not been returned to him. Based on Stewart’s false representations, investors gave Stewart anywhere from $5,000 to $50,000 per timber bid, totaling more than $1 million.
Elmer Swain Stewart, 67, of Cleveland, Georgia, was sentenced by U.S. District Court Judge Richard W. Story to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $218,000. Stewart pleaded guilty to one count of wire fraud on December 8, 2017.
“Swain Stewart swindled over $1 million from my husband and me and at least seventeen other victims,” said one of the victims. “Stewart used our money and the other investors’ money to take Hawaiian vacations, fishing trips to Alaska, and hunting trips out West. In doing so, he devastated our retirement and the retirements of many other people. Stewart’s actions demonstrate nothing but greed. I don’t know how he sleeps at night. What a legacy to leave for your family!”
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys William L. McKinnon, Jr. and John Ghose prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.