Dallas Man Admits His Role in a $6.4 Million Diamond Investment Fraud Scheme
For Immediate Release
U.S. Attorney's Office, Northern District of Texas
DALLAS — Jay Bruce Heimburger, 58, of Dallas, appeared yesterday before U.S. Magistrate Paul D. Stickney and pleaded guilty to his role in a diamond investment scheme that the indictment alleged ran from approximately March 2011 to November 2013, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Heimburger pleaded guilty to one count of mail fraud. He faces a maximum penalty of not more than 20 years in federal prison and a $250,000 fine. Restitution could also be ordered. Sentencing is set for October 16, 2017.
Co-defendant Christopher Arnold Jiongo, 56, of Houston, pleaded guilty in May 2017 to one count of wire fraud. Jiongo is scheduled to be sentenced September 11, 2017.
Craig Allen Otteson, 65, of McKinney, is scheduled to plead guilty to his role in the scheme on July 18, 2017.
According to documents filed in the case, Otteson acted as the Managing Member and Chief Compliance Officer of Stonebridge Advisors, LLC, located on Belt Line road in Dallas. Stonebridge Advisors was involved as the Managing Partner of Worldwide Diamond Ventures, L.P., located at 6029 Belt Line in Dallas, and it acted as the General Partner of Worldwide Diamond. Heimburger acted as a Principal Partner of Worldwide Diamond, and he was also listed as the registered agent and Director of JBH Securities, Inc. located on San Rafael in Dallas. JBH Securities was primarily involved in the business of providing investment advice. Worldwide Diamond was primarily involved in the business of buying and reselling diamonds on the international market. On October 1, 2013, Worldwide Diamond filed for bankruptcy in the Northern District of Texas.
According to the plea documents signed by Heimburger, during the period from February 20121 through March 2013, Otteson and Heimburger engaged in a scheme to defraud investors, and to obtain money and property from these investors by false and fraudulent pretenses, representations, and promises.
The indictment charged that Jiongo drafted $50,000 diamond notes which Jiongo, Otteson and Heimburger later used as investment vehicles to generate investment funds. As part of their original business plan, Jiongo, Otteson and Heimburger represented to American Safe Retirements (ASR) that all investment funds would be used to buy and resell diamonds and that every dollar invested would always be fully secured by the cash and diamond inventory of Worldwide Diamond. Jiongo, Otteson and Heimburger all understood that ASR would instruct ASR sales agents to represent to investors that every dollar invested through the diamond notes would always be fully secured by the cash and diamond inventory of Worldwide Diamond.
The indictment also alleged that sometime in the summer of 2011, Jiongo, Otteson and Heimburger all realized that their original business plan was not working out as planned and that the defendants therefore could not honor the original promises and representations made to investors. Rather than inform ASR and the investors of the changed circumstances caused by their failed business plan, Jiongo, Otteson and Heimburger chose to deceive ASR when they failed to inform ASR that 100% of all investment funds would not be secured by cash and/or the diamond inventory of Worldwide Diamond. By deceiving ASR, Jiongo, Otteson and Heimburger knew that they were also causing the investors to be deceived about the use of investor funds.
In plea papers filed with the court, Heimburger admitted that he and Otteson engaged in a scheme to defraud investors by fraudulently concealing from investors that investor funds were being used for unauthorized purposes unrelated to the purchase and resale of diamonds. Heimburger also admitted that as part of the scheme to defraud investors, Heimburger and Otteson caused their sales agent to fraudulently sell promissory notes valued at $1,280,000 to 23 new clients in California.
The indictment alleged that during the period from 2011 through 2013, Otteson and Heimburger caused over $6.4 million to be fraudulently collected from 77 Worldwide Diamond investors.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Twenty-six defendants have been charged as part of that initiative; 21 were convicted, one resulted in a mistrial and four are pending trial.
The U.S. Postal Inspection Service is conducting the investigation. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
# # #
Updated August 31, 2017