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Justice News

Department of Justice
U.S. Attorney’s Office
District of South Dakota

FOR IMMEDIATE RELEASE
Wednesday, May 1, 2019

Brookings Man Found Guilty of Wire Fraud

United States Attorney Ron Parsons announced that Timothy Burns, age 50, of Brookings, South Dakota, was found guilty of five counts of wire fraud as a result of a five-day federal jury trial in Sioux Falls, South Dakota. 

Each charge carries a maximum penalty of 20 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.  

Burns and co-defendant Tobias Ritesman were indicted by a federal grand jury on January 9, 2018, after an extensive investigation by the Federal Bureau of Investigation.

Ritesman started a company called Ritesman Enterprises, Inc. in approximately 2012.  Ritesman had three companies that operated under its umbrella: Tinkers and Thinkers, Tiger Consulting, and Global Aquaponics, Inc.  In approximately June 2016, Ritesman formed SD Food Security, LLC.

Burns owned and operated multiple businesses in the Brookings area:  Oakwood Equity Group, LLC, Concrete Contractors, Inc., and Multiply, LLC, d/b/a CF Promo, CF Gear, and I-29 Sports.  Burns held these companies under a parent company called Syntech, Inc.  

Ritesman purportedly sought to build an aquaponics facility in Brookings.  The purpose of this facility would be to raise fish and produce.  Global Aquaponics, Inc. would contribute $5.6 million to the project and own 51% of the facility.  SD Food Security, LLC would contribute $5.4 million to the project—raised primarily by selling investment shares—and own 49% of the facility. 

As part of their fundraising efforts, Ritesman and Burns each circulated a private placement memorandum that contained false and misleading information about the aquaponics facility.  In addition, Ritesman and Burns each made false and fraudulent representations about the facility, either directly or through the salespeople they hired, in an effort to solicit investors for the project.  Bank records show that Ritesman and Burns were each stealing investor money and using it for their own purposes rather than for the aquaponics facility, which was never built.

On April 18, 2019, Ritesman pled guilty to all counts he was charged with: ten counts of wire fraud and eight counts of mail fraud. 

“Ritesman and Burns used the idea of what could be an innovative agricultural facility to defraud dozens of investors for their own personal gain,” said U.S. Attorney Parsons.  “In South Dakota, a state with such strong agricultural roots, such criminal activity will be caught and prosecuted.”

This case was investigated by the Federal Bureau of Investigation and the U.S. Attorney’s Office. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.

A presentence investigation was ordered for both Ritesman and Burns.  Ritesman’s sentencing is set for July 15, 2019.  Burns’ sentencing is set for July 22, 2019. 

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Updated May 1, 2019