Ponzi Scheme Duo Pleading Guilty
(Brookville, Ind.) – A Brookville man who ran a securities scam, swindling residents in Dearborn and Franklin counties as well as the state of Ohio out of millions of dollars, has pleaded guilty in federal court.
Jerry Smith pleaded guilty to Conspiracy to Commit Wire Fraud, Obstruction of Justice and Tax Evasion last week in the U.S. District Court of Southern Ohio.
Smith and his business partner, Jasen Snellin, allegedly duped 72 investors in Indiana, Ohio and Kentucky out of $8.9 million. In Indiana, 30 investors in Dearborn and Franklin counties were swindled out of $4.5 million between 2007 and 2010 as part of a Ponzi scheme disguised as a securities investment venture called CityFund/Dunhill.
In order to get more investors, the two – unlicensed to sell securities – promised large returns.
“At least one investor was told in 2007, earnings exceeded 30%,” according to charging information filed in federal court which had previously been sealed by Judge Herman J. Weber.
VIEW THE CHARGING INFORMATION AGAINST SMITH AND SNELLING HERE (PDF).
Prosecutors said most of the investors funds were never invested in anything, other than Smith and Snelling’s “exorbitant personal expenses and lifestyles.”
Snelling, of Cincinnati, is set to make his own guilty plea next Tuesday, June 26.
Smith and Snelling each face up to 45 years in prison when sentenced. Their sentences will be reduced because of their guilty pleas. Smith’s sentencing is scheduled for September 20.
Smith’s attorney is seeking to have local charges in Dearborn and Franklin counties dismissed, citing to try him there for the same crimes would be double jeopardy.