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Justice News

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

Thursday, March 1, 2018

New Mexico man charged for defrauding investors out of $4.4 million

A New Mexico man was charged in federal court for his role in defrauding investors out of at least $4.4 million, said U.S. Attorney Justin E. Herdman and FBI Special Agent in Charge Stephen D. Anthony.

Eugene Turner, 64, of Animas, New Mexico, was charged via criminal information with one count of wire fraud.

Turner and Timothy E. McShane established several companies between 2006 and 2012, including McShane Construct All International LLC, Rancho Hidalgo LLC, Lordsburg Land Development LLC, Hidalgo Alfalfa Company LLC, New Mexico Natural Beef & Pork, LLC, Firewater Hydrogen Fuel LLC, Granite Gap Development LLC and New Horizons West, Inc.

Turner and McShane solicited investments in the companies by giving investors promissory notes and/or founder’s shares in the companies, which where not registered with the Securities and Exchange Commission nor traded on any public stock exchange.

They collateralized investments in the companies with assets, such as land pledges, crop pledges, real property and other items, purportedly belonging to the companies when, in reality, Turner and McShane knew they did not own those assets.

They used personal, social and business relationships of current investors to establish relationships of trust with prospective investors. They made false statements to investors about the progress of the companies. They also misused funds from new investors to make small payments to other investors who complained about lack of return on their investments, according to the information.

Because of Turner and McShane’s scheme to defraud, investors in the companies had a combined out of pocket loss of approximately $4.4 million between 2008 and 2015. Additionally, they did not receive the interest payments the defendants guaranteed or the investment gains the defendants falsely promised during the scheme, according to the information.

McShane, of Stow, has pleaded guilty to his role in the scheme and is scheduled to be sentenced March 6.

“These defendants stole millions of dollars from investors through years of lies, deception and false promises,” Herdman said. “This case serves as a reminder that there is no such thing as a sure thing and people need to exercise caution when deciding how to invest their savings.”

“This defendant, along with his cohort, defrauded numerous investors out of millions of dollars all under a ruse that they would receive financial benefit from their investments,” Anthony said. “Until now, the only people that benefited were the defendant, Eugene Turner, and his partner, Timothy McShane, but their time has come and both will be held accountable for their fraudulent scams.” 

This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Chelsea Rice.

If convicted, the Court will determine the defendant's sentence after a review of factors unique to this case, including the defendant's prior criminal record, if any, the defendant's role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

Financial Fraud
Mike Tobin 216.622.3651
Updated March 1, 2018