Four Defendants Indicted for Securities Fraud, Conducting International Pump-and-Dump Scheme, and Money Laundering
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – November 6, 2015
San Diego, CA - William Ison, who recruited investors by making bogus claims during presentations at financial seminars throughout the United States, was sentenced today to 27 months in custody for defrauding investors, including several from San Diego, of approximately $7 million. U.S. District Judge Dana M. Sabraw also ordered Ison to pay back victim losses as restitution.
Ison previously admitted making fraudulent presentations to potential investors to persuade them to invest in “private placement programs” with co-defendant Douglas Ellingson (who was previously sentenced to 18 months in custody for his role in the scheme). Ison, who represented he was President of Blue Diamond Excavation, Inc. (“BDE”), a mining excavation company based in Newport Beach, claimed investors’ funds would be secured by the company’s assets worth $86 billion, which he had already used to secure medium-term notes (“MTNs”) valued at over $2 billion. In fact, BDE had not produced any income from mining and had not obtained any MTNs.
In addition to lying to seminar participants that he personally made more than $100 million through an investment program, Ison also falsely claimed he managed a consortium of large non-profit foundations that donated more than a trillion dollars annually to various humanitarian causes. Many victims reported they were induced to participate in the scheme only because of Ison’s promises that a portion of profits would go to successful charities that eradicated poverty and developed a cure for AIDS.
Ison and Ellingson, who together were responsible for over $10 million in victims’ losses, initially participated in a scheme involving the Winsome Investment Trust, with James Pantazelos and Robert Andres. Both Pantazelos and Andres were prosecuted for their roles in related fraud schemes. Pantazelos was sentenced in Chicago to 114 months in custody and ordered to pay over $3.3 million in restitution on February 15, 2013 (United States v. Pantazelos, No. 11CR50078 (N.D. Ill. 2011)). Andres was sentenced in Utah to 56 months in custody and ordered to pay over $3.2 million in restitution (United States v. Andres, No. 11CR0985-RJS (D. Utah 2011).
Judge Sabraw noted that the victims were injured in “immeasurable ways” as a result of Ison’s intentional misrepresentations that he knew would cause smart people to part with a lot of money, including from withdrawals of college and retirement savings.
U.S. Attorney Laura Duffy said, “Although we are comforted that these defendants can no longer target citizens in fraudulent get-rich-quick schemes under the guise of humanitarian charity, we understand there is no shortage of con men who seek to separate people from their savings. Thankfully, the FBI and IRS will maintain their vigilance for such scams.”
“Today’s sentencing marks the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Special Agent in Charge Erick Martinez of IRS-Criminal Investigation. “Ison took advantage of unsuspecting investors for purported humanitarian causes. Hopefully he will now understand that his irresponsible actions have real consequences.”
DEFENDANT Case Number: 12CR4030-DMS
William Ison Age: 55
SUMMARY OF CHARGE
Title 18, United States Code, Sections 371, 1343 (Wire Fraud Conspiracy)
Maximum penalty: 5 years of custody; $250,000 Fine (or twice the gross loss of the offense
Federal Bureau of Investigation
Internal Revenue Service