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Press Release

Texas Man Sentenced for Money Laundering

For Immediate Release
U.S. Attorney's Office, Western District of Missouri

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Stephenville, Texas, man has been sentenced in federal court for engaging in money laundering by conducting financial transactions with funds derived from a wire fraud scheme.

 

Lewis Dean McBride, 65, of Stephenville, was sentenced by U.S. District Judge Howard F. Sachs on Tuesday, Aug. 11, 2015, to three years and four months in federal prison without parole. The court also ordered McBride to pay $430,000 in restitution, of which $25,000 was paid at the sentencing hearing.

 

McBride, a financial planner and licensed insurance agent, was the owner of Cowboy Financial, LLP in Texas. He was also co-owner with David Vorbeck in D&D Advisors, LLC, in Lee’s Summit, Mo. From 1995 until 2010, McBride’s estate planning often involved viatical and life settlement investments. Beginning in 2002, D&D Advisors served as manager for several other LLCs created by McBride for life settlement investment transactions conducted with several of McBride’s clients.

 

According to court documents, McBride continued to sell unregistered securities in the form of viatical settlement investments following a 2003 Missouri cease and desist order prohibiting him from these types of sales. According to court documents, McBride, with the help of Vorbeck, constructed and sold many high-risk, illegal insurance investment deals.

 

The specific fraud scheme related to the money laundering conviction involved three victims who entered into investment transactions in which they provided a total of $370,000, which they understood to be secured by two life insurance policies, each having a face death benefit amount of $500,000. They loaned money to McBride, with the principal to be repaid from the proceeds of the sale of the two insurance policies or the proceeds from the death benefits of the two insurance policies. However, none of the victims ever received any proceeds.

 

Another company formed by McBride and Vorbeck, Philley Insurance, LLC, sold one of the insurance policies that had been used to guarantee the three investments. Philley Insurance sold the policy to Milestone, an investment company, for $95,000. Philley Insurance made fraudulent claims in its contract with Milestone, which led Milestone to believe that no other entity or person had been promised proceeds of the death benefits and that no other entity or person had a security interest in the policy. However, Philley Insurance knew when it entered into the contract with Milestone that several other investment clients had been promised proceeds from the policy or security interests in the policy.

 

Milestone wired $95,000 to the bank account of D&D Advisors. The funds were then transferred to the accounts of other businesses owned by McBride. The client investors were never paid what they had been promised.

 

In a separate but related case, McBride’s company, D&D Advisors, also pleaded guilty to money laundering and has paid an additional $370,000 in restitution to the victims of the investment fraud scheme. D&D Advisors was required to surrender all governmental licenses and the firm has been dissolved.

 

This case was prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by IRS-Criminal Investigation.

Updated August 14, 2015

Topic
Financial Fraud