Jury convicts Arizona and California men of $20 million investment fraud | USAO-EDVA
NORFOLK, Va. – A federal jury yesterday convicted an Arizona man and a California man of conspiracy to commit mail and wire fraud, wire fraud and money laundering, in connection with a national investment scheme involving fraudulent investments in wireless spectrum and dental franchises.
According to court records and evidence presented at trial, from around 2011 to 2017, David Alcorn, 78, of Scottsdale, Arizona, and Aghee William Smith II, 70, of Roseville, California, were part of a fraud conspiracy to the investment which operated out of California, Arizona, Florida, Idaho and Hampton Roads, among other locations across the country. Alcorn, Smith and their co-conspirators, including Kent Maerki, 78, and his wife Norma Jean Coffin, 60, of Arizona, Daryl Bank, 51, of Florida, insurance salesman Tony Sellers, 62 , of Idaho, insurance salesman Tom Barnett, 69, of California, attorney Billy Seabolt, 56, of Williamsburg, Raeann Gibson, 49, of Florida, and Roger Hudspeth, 51, of Suffolk – tricked hundreds of unsuspecting investors, most of whom were at or near retirement age, into investing or sending money to companies owned and controlled by Alcorn, Bank and Maerki. Alcorn and others then diverted significant portions of the investment funds to pay for their criminal enterprise and lavish lifestyle, as well as paying exorbitant commissions to Smith and other salespeople.
Smith began selling these fraudulent investments in 2011 for Alcorn, Maerki and Bank. The conspirators used material misrepresentations to sell illiquid and highly speculative investment vehicles which were then used as fraud vehicles. Based on these fraudulent misrepresentations, unsuspecting investors cashed in 401(k) and other retirement accounts to invest without knowing that Alcorn, Bank and Maerki were immediately transferring 20% to 70% of the funds to other companies they controlled in the form of so-called “fees”. As a result of this investment fraud scheme, the victims suffered losses of over $20 million.
Alcorn was found guilty of conspiracy, wire fraud and money laundering. He faces a maximum sentence of more than 200 years in prison when sentenced on June 23. Smith was convicted of conspiracy and wire fraud, and he faces a maximum sentence of more than 90 years in prison when sentenced on June 23. Actual penalties for federal crimes are generally less than the maximum penalties. A federal district court judge will determine any sentence after considering US sentencing guidelines and other statutory factors.
Bank was found guilty after a trial of conspiracy, mail and wire fraud, sale of unregistered securities, securities fraud and money laundering, and was sentenced in September 2021 to 35 years in prison. Maerki pleaded guilty to conspiracy and was sentenced in March 2021 to 16 years in prison. Seabolt was found guilty after a conspiracy and mail fraud trial and sentenced in September 2021 to 10 years in prison. Gibson pleaded guilty to conspiracy and was sentenced in February 2020 to 10 years in prison. Hudspeth pleaded guilty to investment adviser fraud and money laundering and was sentenced in May 2018 to more than 12 years in prison. Sellers pleaded guilty to conspiracy and was sentenced in January 2022 to 5 years in prison. Coffin and Barnett each pleaded guilty to conspiracy and will be sentenced in March and May 2022 respectively.
Jessica D. Aber, United States Attorney for the Eastern District of Virginia; Brian Dugan, Special Agent in Charge of the FBI Field Office in Norfolk; Darrell J. Waldon, special agent in charge of the Internal Revenue Service’s Criminal Investigations Unit; and Greg L. Torbenson, acting inspector in charge of the Washington Division of the United States Postal Inspection Service, made the announcement after Senior U.S. District Judge Raymond A. Jackson accepted the verdict.
The Virginia State Corporation Commission provided significant assistance in this investigation.
Assistant U.S. Attorneys Melissa O’Boyle, Elizabeth Yusi and Andrew Bosse are prosecuting the case.
Combating elder abuse and financial fraud targeting seniors is a key priority for the Department of Justice. Elder abuse is an intentional or negligent act on the part of any person that causes harm or serious risk of harm to an older person. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, emotional abuse and sexual violence. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10% of older Americans each year. Together with our federal, state, local, and tribal partners, the Department of Justice is strongly committed to combating all forms of elder abuse and financial exploitation through law enforcement actions. law, training and resources, research, victim services and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
A copy of this press release can be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information can be found on the District Court for the Eastern District of Virginia website or on PACER by searching for case #2: 19-cr-47.