Rapid City Man Sentenced on Fraud and Tax Charges

United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man convicted of Wire Fraud and Making and Subscribing a False Tax Return was sentenced on May 19, 2017, by Chief Judge Jeffrey L. Viken, U.S. District Court.

Mike Lundy, a/k/a Barkley J.W. Lundy, age 68, was sentenced to 5 years of imprisonment, followed by 3 years of supervised release, and ordered to pay a $200 special assessment to the Federal Crime Victims Fund, $1,368,671.96 in restitution to victims, and $257,399.00 in restitution to the Internal Revenue Service.

Lundy was charged on February 7, 2017, and pleaded guilty on February 14, 2017. The conviction stems from Lundy, a registered investment advisor, encouraging clients to invest in a company called Associates Investments, which he claimed offered investments in municipal bonds or other types of securities. Numerous victims provided Lundy a total of $4,247,123.19. Associates Investments was not an actual investment firm, but rather Lundy took the investors’ money and deposited it into a checking account solely controlled by him. Despite leading the victims to believe he was investing the money provided to him and Associates Investments, the monies were never invested. Although some investors received payments on their investments, those payments were largely funded with incoming money fraudulently obtained from new investors. Lundy also used a portion of the monies for his own personal expenses such as a mortgage, vacations, a car, and remodeling projects. During the years in which Lundy was fraudulently running his scheme, he underreported his income to the Internal Revenue Service.

This case was investigated by the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Ben Patterson prosecuted the case.

Lundy was immediately turned over to the custody of the U.S. Marshals Service.