Fraudster Sentenced to Five Years in Prison for $2 Million Ponzi Scheme
A Honduran man who conned investors out of roughly $2 million has been sentenced to five years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Jose Anibal Linares, 42, pleaded guilty to one count of mail fraud in October 2020. He was sentenced today to 60 months in federal prison by U.S. District Judge David C. Godbey, who also ordered him to pay more than $2.3 million in restitution. A Honduran citizen in the U.S. formerly on Temporary Protected Status, Mr. Linares may be subject to removal from the U.S. after serving his sentence.
According to plea papers, Mr. Linares admitted to running a Ponzi-type scheme, luring investors into handing over “principal” that he later deposited in bank accounts at Wells Fargo, Bank of America, and Legacy Texas, then paying them “interest” from other investors’ principal payments.
Mr. Linares, who operated JC Loans Finance and Inversiones JC Dallas, admitted he falsely told investors their funds were “insured by the FDIC” and promised monthly returns based on investments in commercial and residential real estate, including a water resort and shopping centers in Honduras. He then mailed investors letters thanking them for joining the JC “family.”
Instead of investing their money, however, Mr. Linares admits he spent substantial amounts of investor funds on personal expenditures, and even wired some of the money to family members in Honduras.
In the meantime, he made lulling payments to investors by withdrawing large sums from his Bank of America and Wells Fargo accounts, generally using funds that had been deposited immediately beforehand from other investors. On some occasions, he even took investors’ cash payments from one set of investors in his office, then turned the cash over to other investors waiting in his lobby for their monthly disbursements.
By summer 2017, Mr. Linares admits, he had ceased all monthly payments and did not return investors’ principal investments.
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorney Katherine Miller is prosecuting the case.