April 17, 2024

Disbarred California Attorney Sentenced To Five And A Half Years In Prison For Long-Running Multi-Million-Dollar Investment Fraud Scheme | USAO-SDNY

Disbarred California Attorney Sentenced To Five And A Half Years In Prison For Long-Running Multi-Million-Dollar Investment Fraud Scheme | USAO-SDNY

Damian Williams, the United States Legal professional for the Southern District of New York, announced that DEREK JONES, a disbarred California legal professional, was sentenced now to 5 and a 50 % a long time in jail.  JONES ran fraudulent financial investment cash, like actual-estate expense firms and a enterprise-cash firm, by means of which he defrauded buyers of more than $8.6 million above a time period of much more than 7 a long time, from at the very least 2012 by 2019.  JONES previously pled guilty to one particular rely of wire fraud and was sentenced right now in advance of United States District Judge Loretta A. Preska.

U.S. Lawyer Damian Williams mentioned: “When buyers acquire shares in serious-estate resources and other expense resources, individuals traders have every suitable to count on that the people today selling and selling those people investments are managing them honestly and telling them the reality about their investments.  Today, Derek Jones, a disbarred attorney, was held accountable for violating this proper in excess of an prolonged period of time, advertising interests in authentic estate that he falsely claimed to have and defrauding his buyers out of tens of millions of pounds.”

In accordance to the Indictment, statements built in court docket, and other publicly filed files in this circumstance:

From at minimum 2012 by at least 2019, JONES deceived his victims into investing in several companies and investment decision cash that he controlled, such as purported actual-estate advancement and financial investment corporations using variants of the names “BlueRidge,” “Living Town,” and “Atiswin,” and the purported venture capital company Notice Holdings (“Realize”).  

In fraudulently inducing victims to commit in his resources, JONES routinely lied to traders, such as in glossy brochures and lawful files that contained misrepresentations about authentic estate that JONES falsely claimed was owned or normally managed by BlueRidge, Living Town, and Atiswin.  For example, JONES falsely instructed investors and future traders that BlueRidge was producing a “resort village” on land it managed on Semiahmoo Spit in Washington Condition and, independently, that BlueRidge had obtained an current resort in that very same site, when in reality neither BlueRidge nor JONES owned or controlled any of that property.  In other cases, JONES falsely claimed that his organizations have been under agreement to invest in a ranch in Colorado and that his providers experienced secured very long-time period leases for several items of house slated for development, which include California qualities in Santa Monica, Hermosa Beach front, and Los Angeles.  Instead of utilizing investors’ funds as he promised, JONES misappropriated investors’ income, using considerably of it to make Ponzi-style payments to other buyers to whom he owed money in relationship with before transactions and for own and loved ones costs, including the non-public-university tuition of his small children.

In executing his scheme, JONES also despatched falsified and counterfeit files to buyers and other people.  For illustration, on recurring situations, JONES offered doctored bank statements exhibiting that he experienced thousands and thousands of dollars in many company accounts, when in simple fact he had little or no funds in this sort of accounts.  On other situations, he delivered counterfeit financial statements that falsely purported to be based mostly on internal audits of providers that he managed.  He also sent investors and other folks falsified contracts with key web pages taken off, solid land-leases, and fictional statements of asset allocation.  JONES also utilized the names of other individuals — with no people individuals’ authorization or know-how — to communicate by using e-mail with traders and hence foster the illusion that JONES’s companies were being viable functions with genuine staff members.

In complete, JONES defrauded traders out of extra than $8.6 million.

For the duration of the fee of the fraud charged in this scenario, JONES was suspended from the apply of legislation by the State Bar Courtroom of California for earlier fraudulent carry out.  JONES was in the long run disbarred in July 2022 dependent on findings by the Point out Bar Court docket that he experienced deliberately misappropriated dollars belonging to a shopper in 2011 and that he experienced created misrepresentations to the consumer, to the court docket, and to others.

*                *                *

JONES, 48, of San Marino, California, pled responsible on November 1, 2021, to a one count of wire fraud.  He was sentenced these days to 5 and a half years in jail, three many years of supervised release, forfeiture of $8,679,787.66, and restitution to his victims in an sum to be identified inside of the next 90 times.  

Mr. Williams praised the great do the job of the Federal Bureau of Investigation.

This scenario is becoming dealt with by the Office’s Complicated Frauds and Cybercrime Unit.  Assistant U.S. Attorneys David Raymond Lewis and David M. Abramowicz are in demand of the prosecution.