|Targeted News Service|
Smith also admitted that he engaged in obstruction by creating fictitious trading statements and providing them to federal agents to impede the investigation and cover up the fraud. Finally, Smith admitted that he committed tax evasion by failing to report the embezzled investor funds as income on his tax returns for the tax year 2008 and additional tax years.
"Consistent with a classic Ponzi scheme, early investors were paid interest or return of capital payments, which were not generated by investment earnings, but rather by monies solicited from later investors," Stewart said. "These payments served to lull the victims into a false sense of security and to prevent or delay the discovery of the fraudulent investment scheme."
During the course of this fraudulent scheme, Smith used investors' money to pay for his expensive rural
Smith issued himself a monthly payment from
"Investment fraud is like a 'house of cards.' Because Ponzi schemes have no legitimate business purpose, they can collapse when the money runs out, leaving many investors in financial ruin," said
This case was prosecuted by Senior Litigation Counsel
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