Two Men Charged With $983,000 Investment Fraud Scheme
ROCKFORD — A Rockford man and a California man were indicted today by a federal grand jury in Rockford on fraud charges. TODD C. SMITH, 46, of Rockford, was charged with seven counts of mail fraud and ten counts of wire fraud, and TRAVIS OLIVER, 36, of Tremecula, Cal., was charged with eight counts of mail fraud and fifteen counts of wire fraud, in connection with a scheme to defraud investors by falsely representing to investors that their investments in Electus Asset Holdings were guaranteed, fraudulently obtaining more than $983,000 from the investors.
According to the indictment, Oliver was sole managing member of Electus Asset Holdings, and both Oliver and Smith solicited individuals to invest in Electus Asset Holdings, engaging in a scheme from Feb. 13, 2009, to at least March 2012, to defaud investors. The indictment alleges the defendants falsely represented to the investors that their investments would be returned in one year, yielding a guaranteed rate of interest per month, and that the funds could be withdrawn at any time without penalty. However, it is alleged the defendants knew a large portion of the investors’ funds was used to pay personal and other expenses, such as commissions to the defendants, and to make interest and principal payments to other individuals who had invested money with Oliver prior to the formation of Electus Asset Holdings in January 2009, and that the remainder of the investors’ funds was placed in a non-guaranteed investment.
It is further alleged that in order to conceal their false promises and misrepresentations, and prevent the investors from demanding the return of their principal, defendants used funds from new investors to pay interest and principal owed to prior investors. The indictment also charges that defendants mailed monthly statements and IRS 1099-INT forms to investors that falsely stated that the investors had earned interest on their investments, when defendants knew no interest had been earned on the investments.
The indictment alleges that when investors requested the return of their interest and principal, Oliver and Smith made false statements and promises to conceal the fact the investors’ money had been spent or lost in high risk investments, including that the investors’ checks were going to be issued shortly, that their checks were lost in the mail, and that the investors’ money was invested in company that was under investigation by the Federal Trade Commission and its assets had been frozen.
Each count of mail fraud and wire fraud carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines, as well as restitution. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Antonio Gomez, Postal Inspector-In-Charge of the Chicago Division of the U.S. Postal Inspection Service. The Illinois Secretary of State Securities Department assisted in the investigation.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
The public is reminded that an indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving each defendant’s guilt beyond a reasonable doubt.