Daily Court Reporter - News Ohio man charged with defrauding investors in $50 million Ponzi scheme
Ohio man charged with defrauding investors in $50 million Ponzi scheme
A Jackson, Ohio man has agreed to plead guilty in U.S. District Court to orchestrating a $50 million dollar Ponzi scheme that defrauded at least 46 investors.
Jason E. Adkins, 40, was arraigned in federal court recently in Columbus.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, William Cheung, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation and Todd Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the case.
According to the plea agreement, beginning in 2012 and continuing through 2018, Adkins conspired to solicit millions of dollars from investors under false pretenses, failed to invest the funds as promised and misappropriated investors’ funds for his own benefit and the benefit of others.
Adkins and others claimed that they bought and sold over-sized tires commonly known as off-the-road tires, which are used on earth moving equipment and/or mining equipment. Investors were told their money would be used to buy the tires at a steep discount, and that the tires would then be re-sold to a buyer at a much higher rate.
Investors were promised a 15 to 20 percent rate of return on investment, generally within 180 days. Adkins would sometimes pay the return on investment for the first transaction with investor victims.
“Making good on early investments perpetuated Adkins’s scheme by appearing to corroborate his claims, which helped him attract more investors,” said U.S. Attorney Glassman. “What the victims didn’t know was that Adkins was paying off early investments with the money from later ones. Although the product that Jason Adkins was purporting to buy and sell—oversize tires—was unusual, the operation of his scheme was not. It was right out of Ponzi’s playbook.”
For example, although two specific investors were paid for their initial investment of $20,000 with Adkins in 2016, they only received $320,000 total from Adkins in return for approximately $1 million worth of investments overall.
Adkins used several methods to conceal the scope of the Ponzi scheme and to minimize associated tax liabilities. For example, he and others sent various amounts of investor funds through a long series of wire transfers to many bank accounts. He created more than 15 corporate bank accounts to receive and distribute fraudulently obtained funds from investors.
Adkins also laundered his ill-gotten proceeds for at least five years, inlcuding by investing in front businesses created by co-conspirators.
Adkins bought cars, vacations and property with the funds from the scheme. For example, he paid for the construction of a pool at his personal residence and also paid more than $20,000 to lease a private jet.
Further, Adkins failed to file individual income tax returns reporting his income derived from the scheme. In 2013, specifically, Adkins earned at least $1.1 million, which caused a tax loss of nearly $237,000 to the IRS.
“A person who creates a web of financial lies will soon be caught up in it. Mr. Adkins offered rates of return of 15 to 20 percent to investors and unfortunately these were false promises,” said William Cheung, Acting Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office. “No matter the source of income, everyone has an obligation to the American public to pay their fair share of income taxes. The success of this investigation was a direct result of the excellent partnership amongst IRS Criminal Investigation, FBI, and the U.S. Attorney’s Office.”
Adkins has agreed to plead guilty to three counts of wire fraud and six counts related to money laundering – all crimes punishable by up to 20 years in prison – and one count of tax evasion, which carries a maximum penalty of up to five years in prison.
U.S. Attorney Glassman commended the investigation of this case by the IRS Criminal Investigation and FBI, as well as Assistant United States Attorneys Douglas W. Squires, David M. DeVillers and S. Courter Shimeall, who are representing the United States in this case.
If you believe you’re also a victim of Adkins’s scheme, please contact the U.S. Attorney’s Office Victim Witness Coordinator, Barbara Vanarsdall, at 614-469-5715.
About the United States Attorney's Office for the Southern District of Ohio
Our mission is to protect and serve the citizens of the Southern District of Ohio through the ethical, vigorous and impartial enforcement of the laws of the United States, and in so doing to defend the national security, improve the safety and quality of life in our communities, protect the public funds and financial assets of the United States, maintain a courteous and professional working environment, and, with skill and integrity, seek to do justice in every matter
We are the United States Attorney’s Office for the Southern District of Ohio, one of 94 United States Attorney’s Offices in the country. We are a part of the Department of Justice. Our District is comprised of 48 counties in the southern half of the state.
We represent the interests of the United States, both criminal and civil, in federal court. It is our responsibility to enforce federal criminal laws. We work to prevent terrorism and promote the nation’s security. We are committed to preventing crime, enforcing federal laws, and representing the rights and interests of the American people. We strive to ensure the fair and efficient administration of justice for all Americans.
We prosecute those individuals and organizations that violate federal criminal statutes. We work with a multitude of federal, state, and local agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the Bureau of Immigration and Customs Enforcement (ICE), the Internal Revenue Service (IRS), the U.S. Forest Service, the U.S. Park Service, the U.S. Marshal’s Service, the U.S. Postal Inspection Service, the U.S. Secret Service, The Ohio Highway Patrol, and multitude of local law enforcement agencies. We prosecute a wide-variety of offenses including domestic and foreign terrorism; child pornography and exploitation; civil rights violations; bank robbery and other violent crimes; firearms offenses; drug trafficking; health care fraud; immigration violations; public corruption; tax evasion; mail, bank and wire fraud; environmental offenses; and identity theft.
We also represent the United States in civil litigation, affirmative and defensive. As such, we sue individuals or entities who have violated federal civil laws. We also defend the interests of the United States when it, or one of its departments, agencies, or employees is sued, and we defend federal programs and agency actions.
We collect monies owed to the United States from forfeiture, restitution, and fines imposed as a part of the judgment in federal cases. We also pursue collection of civil debts owed to the United States, including student, small business, housing, and farm loans. Finally, we represent the interests of federal agencies in bankruptcy court.
Our district covers the bottom half of the state of Ohio.
Our district contains three staffed offices in Columbus, Cincinnati, and Dayton. The Columbus office is the headquarters of our District and is the largest, followed by Cincinnati then Dayton.
Date Published: April 25, 2019