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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Iowa

FOR IMMEDIATE RELEASE
Thursday, November 21, 2019

Trying to Obstruct the Justice System to Help Out His Brother Results in Federal Prison Time for Idaho Man

Sentenced to Prison for Conspiring with Brother to Pay Off Victim in $2.4 Million Iowa Ethanol Plant Scheme

An Idaho man who agreed to help his brother try to pay off a victim of his brother’s $2.4 million wire fraud and identity theft scheme was sentenced on November 19, 2019, to two months in federal prison.

David Emerson Smith, age 71, from Pocatello, Idaho, received the prison term after a May 6, 2019, guilty plea to one count of conspiracy to obstruct, influence, and impede an official proceeding.

In a plea agreement, David Smith admitted that, from June 2017 through July 2018, he agreed with his brother Darrell Smith to obstruct, influence, and impede Darrell Smith’s federal sentencing hearing in late 2018.  While he was in jail awaiting his sentencing hearing in June 2017, Darrell Smith told David Smith in a recorded telephone call that one of the victims of his fraud scheme could “make it really hard” for Darrell Smith if she continued to “complain” to the government.  Darrell Smith told David Smith it would be “two extra years” if the victim continued her complaint, but Darrell Smith could get the victim some stock shares within a year.  At Darrell Smith’s request, David Smith agreed to contact the victim on the telephone and, in February 2018, David Smith sent a letter to the victim at Darrell Smith’s request.  The letter indicated Darrell Smith had $40,000 for the victim, in her children’s names, in accounts at an investment company.  The letter also reminded the victim she had “$350,000 in tax credits” and two million shares of an energy company available to her.  In truth, the “tax credits” and shares were fraudulent.

Law enforcement officers discovered the scheme to obstruct justice before Darrell Smith’s sentencing.  In October 2018, the court found Darrell Smith stole $2.4 million from his investment clients, including $161,800 from the victim whom David Smith contacted at Darrell Smith’s request.  The court also found Darrell Smith had obstructed justice and sentenced Darrell Smith to 175 months in federal prison upon his guilty pleas to wire fraud and aggravated identity theft.

David Smith was sentenced in Cedar Rapids by United States District Court Chief Judge Leonard T. Strand.  David Smith was sentenced to 2 months’ imprisonment and fined $5,500.  He was ordered to make $161,800 in restitution to the victim of his obstruction on a joint and several basis with Darrell Smith.  He must also serve a two-year term of supervised release after the prison term.  There is no parole in the federal system.

David Smith was released on the bond previously set and is to surrender to the United States Marshal in Boise, Idaho, on January 2, 2020.

The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service.

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl

The case file number is 18-CR-2071.

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Topic(s): 
Financial Fraud
Component(s): 
Updated November 22, 2019