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To Prison For Fraud, Money Laundering And Tax Evasion
CONCORD, NEW HAMPSHIRE – Frederick V. McMenimen, III, 53 formerly of Exeter, NH was sentenced in United States District Court for the District of New Hampshire to 42 months in prison for mail fraud, money laundering and federal income tax evasion, announced United States Attorney John P. Kacavas.
Beginning in September 2008, through October 2011, McMenimen fraudulently solicited more than $1 million in purported investments from some of his financial advisory clients. Each of the clients was an elderly widow whose family had long-standing personal relationships with his family.
McMenimen advised each client to liquidate existing annuities or other investments, to deposit the proceeds in their checking accounts and to then write checks payable to PSB. In most instances, McMenimen caused the clients to write those checks by falsely leading them to believe that PSB was another investment vehicle that was better for them than their existing annuities. In actuality, PSB was a shorthand reference to a defunct retail sporting goods business, PSB Sports LLC, that McMenimen had once owned and operated.
McMenimen deposited the checks into a bank account he maintained in the name of PSB. He then used those funds to purchase official bank checks which he directly or indirectly deposited into a checking account maintained in a relative’s name at an FDIC insured financial institution. The relative in whose name the account was maintained provided McMenimen with several books of pre-signed but otherwise blank checks, thereby affording McMenimen complete access to the fraudulently obtained funds.Despite expending all of the proceeds on personal expenses, McMenimen did not record any of the fraudulently obtained funds as income on the tax returns he filed for tax years 2008, 2009 and 2010. Since McMenimen underreported his income for those tax years, his tax returns reflected a tax due and owing that was substantially less than his true tax liability.
This case was investigated by the Bedford (N.H.) field of the Federal Bureau of Investigation, the Portsmouth (N.H.) field office of the IRS’s Criminal Investigation division and the Department of Education. The case was prosecuted by Assistant United States Attorney Bill Morse.