California Man Claiming to be a Billionaire Financier Convicted in Multimillion-Dollar Fraud Scheme
COLORADO — Following a two-week trial, a federal jury in Denver, Colorado, has convicted a California man of multiple charges for his role in an investment scheme in which he falsely told investors that he was a billionaire who could access certain financing, including hundreds of millions in cash in an overseas bank account, in exchange for up-front fees.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Inspector in Charge Craig Goldberg of the U.S. Postal Inspection Service’s Denver Division and Acting Inspector in Charge Bill Hedrick of the U.S. Postal Inspection Service’s Chicago Division, made the announcement.
Kenneth Brewington, 55, of Corona, California, was convicted of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, five counts of wire fraud, one count of conspiracy to commit money laundering, one count of laundering monetary instruments, and two counts of engaging in monetary transactions in property derived from specified unlawful activity.
“Kenneth Brewington and his co-conspirators deceived investors by falsely claiming to have hundreds of millions of dollars in cash in an overseas bank account as part of a criminal scheme to steal the investors’ hard earned money,” said Acting Assistant Attorney General Cronan. “The Department of Justice is dedicated to working with our law enforcement partners to identify and prosecute people who are involved in fraudulent investment schemes, and to pursuing justice for the victims of those crimes.”
“Fraudsters believe they can maintain this lifestyle on the backs of unsuspecting victims, but this arrest should be a warning to all that law enforcement will not stand for these schemes,” said Acting Inspector in Charge Nicole Davis of U.S. Postal Inspection Service’s Criminal Investigations Group. “Postal Inspectors have made it our mission to protect our customers from exploitation and fraud and we will continue to actively investigate these schemes and pursue convictions of these fraudsters.”
According to evidence presented by the government at trial, beginning in approximately 2009, the defendant told victims that he required millions of dollars in supposed fees in order to access his extraordinary wealth abroad, which in turn could be used for financing. During the scheme, the defendant and his co-conspirators sold promissory notes to victims, including through a financial-services marketing company based in Denver called Compass Financial Solutions (CFS).
The defendant and his co-conspirators falsely represented to their victims that their money would be used to pay for, among other things, bank transaction fees and tax penalties to the IRS. To conceal the nature of their scheme, the defendant and his co-conspirators told victims to wire their funds into an attorney-trust account.
The funds from that account, however, were then sent to the defendant and his co-conspirators and spent on, among other things, repayments to other investors and personal expenses. The evidence presented at trial showed that the defendant was not, in fact, wealthy and instead struggling to pay his personal debts. The defendant’s victims lost over $3 million to his fraud scheme.
The defendant’s sentencing is set for Aug. 17, before U.S. District Court Judge Philip A. Brimmer, who presided over the trial of the case.
The former corporate counsel for CFS, William E. Dawn, 80, of Denver, Colorado, and the former CEO of CFS, Brian G. Elrod, 61, of Lakewood, Colorado, previously pleaded guilty for their roles in the scheme. Sentencing hearings are scheduled for June 19 and June 20, respectively.
The investigation was led by the U.S. Postal Inspection Service. The U.S. Attorney’s Office for the District of Colorado and the Securities and Exchange Commission also provided substantial assistance in this matter. Trial Attorneys Anna G. Kaminska, Kyle C. Hankey, and Jennifer G. Ballantyne and Assistant Chief Henry P. Van Dyck of the Criminal Division’s Fraud Section prosecuted the case.
SOURCE – The Department Of Justice (DOJ)