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Ind. Supreme Court Denies Appeal Of Ponzi Scheme Case

Posted On May 14, 2014

By Mike Perleberg

Indiana Supreme Court room

Indiana Supreme Court room

(Indianapolis, Ind.) – The Indiana Supreme Court won’t take up the case of a Franklin County man convicted of running a Ponzi scheme.

Jerry Smith, of Brookville, is already serving a 65-month sentence in federal prison following his June 2012 conviction in U.S. District Court for Southern Ohio of running a large investment scam with business partner Jason Snelling, of Cincinnati. The two defrauded 72 investors across the tri-state out of $8.9 million.

Smith pleaded to federal charges including conspiracy to commit mail and wire fraud, obstruction, and tax evasion.

Thirty of the victims were in Indiana accounting for $4.5 million. Prosecutors in Dearborn and Franklin counties continued to pursue local charges against Smith for many of the same actions that led to his federal plea and convictions.

Smith’s attorney appealed arguing the continuing state charges are double jeopardy – a defense that forbids a defendant from being tried again on the same or similar charges following a legitimate acquittal or conviction. Local judges and the Indiana Court of Appeals threw out 20 of the 25 Franklin County charges that Smith faced. All charges remained in Dearborn County.

The Indiana Supreme Court heard oral arguments regarding Smith’s appeal on May 1. Smith’s attorney, Robert Hammerle, argued that the local charges should be ruled unconstitutional.

“We’re going to be reducing the double jeopardy statute to near meaninglessness unless that decision is reached here,” Hammerle told the justices.

The state was represented by the Indiana Attorney General’s Office, for whom attorney Ellen Meilaender attempted to persuade justices that all the local charges should be reinstated.

“None of those overt acts are that the defendant failed to comply with Indiana’s regulatory scheme governing securities transactions, and specifically Indiana scheme requiring people to register as a broker before transacting business as such,” Meilaender said.

“The federal government did not convict the defendant for actually engaging in a fraudulent scheme. They charged him with conspiring, or agreeing, to engage in such a scheme.”

On May 7, the Indiana Supreme Court announced its decision to deny transfer of the Dearborn and Franklin County cases. The development keeps the earlier Court of Appeals decision in place.

Snelling is currently in an Indiana prison serving 161 months on his federal court conviction and 40 years on the state charges he pleaded guilty to in Franklin County. His earliest projected release date is in May of 2032, according to the Indiana Department of Corrections website.

According to their plea agreements, the two scammers must pay more than $5 million each in restitution to their Ponzi scheme victims. Snelling must pay more than $597,000 in restitution to the IRS while Smith must pay over $72,000.

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