Former Insurance Agent Sentenced to Prison for Investment Fraud Scheme and Tax Fraud
Contact Person: Dean Secor (843) 727-4381
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Timothy David Mays, age 51, of Walterboro, South Carolina was sentenced in federal court in Charleston, South Carolina, for Wire Fraud, a violation of 18 U.S.C. § 1343, and Willfully Filing a False Income Tax Return, a violation of 26 U.S.C. § 7206(1). United States District Judge David C. Norton of Charleston sentenced Mays on the wire fraud count to 42 months imprisonment to be followed by 3 years of supervised release, and on the tax count to 36 months imprisonment to be followed by one year of supervised release, with the sentences to run concurrently.
According to court documents and evidence presented in open court, from late 2008 through 2011, Timothy “David” Mays was an insurance agent licensed to sell life insurance and accident/health insurance who also touted himself as a “licensed” investor and CEO of Life Trust Financial, LLC, and MaysGroup Financial, investment companies located in Summerville, South Carolina. During that period, Mays represented that he provided financial services, including the sale of annuities and Certificates of Deposit (CD’s). Mays placed advertisements in local publications, including those for senior citizens and retirees, for the sale of CD’s that he claimed were being facilitated through local banks. Mays promised the investors that they would receive the advertised rate of return on the CD’s even if the bank rate was lower than he had advertised. Mays also promised that investors would receive bonuses for 401/IRA conversions and rollovers to CD’s if they met threshold investment funding amounts. Mays made all these representations knowing that he did not have any working relationship with the named banks to sell CD’s or any investment products.
Mays received approximately $1,089,000 from investors under the false pretenses that the money provided would be invested by Mays on behalf of the investors as advertised and promised. Mays only invested $200,000 of the funds for one client, and he returned approximately $203,000 to some of the clients who complained to him and asked for their money back. Mays spent approximately $583,000 on a variety of personal and business expenditures, and he turned over approximately $104,000 of funds that he had left in his accounts to federal authorities during the investigation.
Mays also filed a false U.S. Individual Income Tax Return in February 2007 for calendar year 2006 that understated his total income, and he willfully failed to file U.S. Individual Income Tax Returns for calendar years 2007, 2008, and 2009.
In addition to his prison sentence, Judge Norton also ordered Mays to pay restitution in the total amount of $710,138.41 ($583,087.41 to the victims of the fraud scheme and $127,051 to the IRS).