Fraudster sentenced for perpetrating $20 Million investment fraud scheme
ATLANTA – Franklin B. Trell has been sentenced for conspiracy to commit wire fraud, bank fraud, and money laundering. For over seven years, Trell used myriad corporate entities, complex financial arrangements, doctored financial statements, and false statements to defraud multiple financial institutions and one of Trell’s largest investors out of approximately $20 million dollars.
“Fraud undermines investor confidence and eats at the fabric of our economy,” said U.S. Attorney Byung J. “BJay” Pak. “We and our law enforcement partners will continue to aggressively root-out and prosecute even the most complicated of investment fraud schemes, while securing convictions and strong sentences that will deter others from ever engaging in similar conduct.”
“Individuals who commit this type of fraud should be punished to the fullest extent of the law as a way of deterring this from happening in the future,” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation. “We will continue to work with our law enforcement partners and the U.S. Attorney’s Office in protecting the sanctity and integrity of legitimate investment ventures.”
“The sentencing of Trell is very little solace for the many victims who have suffered from his criminal activities,” said David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office. “Even though the defendant has been ordered to pay restitution the victims may never be financially whole again. Hopefully, the punishment will deter others from preying on other unsuspecting investors.”
According to U.S. Attorney Pak, the charges and other information presented in court: During the timeframe of the conspiracy, Trell and co-defendant Cynthia P. Vinson, on behalf of numerous corporate entities they created, obtained multi-million dollar loans by submitting false statements and invoices to financial institutions about how the money would be spent. During that time period, Trell and Vinson repeatedly lied to their largest investor for years by falsely representing that Trell was putting up half of the working capital into the various business entities, most of which were in the medical imaging business. In reality, Trell failed to put in half of the capital and spent much of the investment funds on himself and his family, including spending over $80,000 of the funds on his daughter’s wedding, and over $1.7 million to settle past lawsuits alleging fraud and other misconduct.
From 2007 to 2010, Trell used investor funds and loan proceeds to settle four lawsuits then pending in Fulton County, Georgia, Superior Court. He also authorized Vinson to withdraw millions of dollars from the corporate entities, which she used for her personal benefit. When confronted by his largest investor about the financial state of the corporate entities, Trell presented doctored accounting records and skillfully moved money from one corporate account to another to create the appearance that he was investing money into the businesses as well. The largest investor gave over $20 million to Trell based on the misrepresentation that Trell was contributing the same amount to the ventures. In truth, the evidence showed that Trell and Vinson personally profited over $9 million from the scheme.
From 2006 to 2013, Trell and Vinson used a number of corporate entities to perpetrate their scheme, including MTC Development, LLC; Sunbelt Construction Management, Inc.; Medical Development Group, LLC; Project Personnel Leasing, LLC; MD Office Solutions, LLC; Medical Facility Development Group, LLC; Imaging Center Development Services, LLC; Medical Property Holding, LLC; Medical Software Holding, LLC; Citrus Tower Boulevard Imaging Center, LLC; Palisades at West Paces Imaging Center, LLC: Southcrest Medical Plaza Imaging Center; the Palisades at West Paces Imaging Center, LLC; Southcrest Medical Plaza Imaging Center; Vinson Holdings, Inc.; Vinson Partners, LLLP; and the Palisades at W. Paces Condo Association, Inc.
Franklin B. Trell, 71, of Atlanta, Georgia, was sentenced by United States District Judge Orinda D. Evans to five years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $20,100,408.25. Trell was convicted on June 22, 2017, after he pleaded guilty.
Cynthia P. Vinson, 66, of Gay, Georgia, will be sentenced by Judge Evans on March 7, 2018, at 1:00 p.m. Vinson was convicted on August 3, 2016, after she pleaded guilty.
This case was investigated by Special Agents of IRS Criminal Investigation and the Federal Bureau of Investigation.
Assistant U.S. Attorney Stephen H. McClain, Chief of the Complex Frauds Section, and Assistant U.S. Attorney Kamal Ghali, Deputy Chief of the Cyber and Intellectual Property Section, 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.