Financial Fraud: David H. DeMathews Sentenced for Wire Fraud and Money Laundering
Columbus Businessman Sentenced to 142 Months for Wire Fraud, Money Laundering
COLUMBUS, Ohio – David H. DeMathews, 63, of Columbus, was sentenced in U.S. District Court to 142 months in prison and ordered to pay approximately $730,000 in restitution for one count of wire fraud and one count of money laundering.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Michael H. Watson.
DeMathews used his positions as Director of National Accounts and Executive Vice President of American Escrow and Title Services, Inc. (AETS), and President of DEMCO Advisory Corporation (DEMCO) to execute a financial fraud scheme.
DeMathews told some victims he would invest their money in the construction of multi-million dollar buildings that were supposed to generate repayment to the investors. He promised some victims he would invest their money in Starbucks franchise opportunities in Central America, hospital projects in Panama and Nicaragua, and a water treatment plant in Florida.
He also used some victims’ investments to make partial repayments to other victims, in order to convince those victims that AETS and DEMCO were generating income, and to encourage those victims to make additional investments in AETS and DEMCO.
From 2009 through April 2014, DeMathews had no legitimate income of any kind. He received approximately $911,000 for the purpose of executing his scheme, and misappropriated those funds for primarily his personal use. Those personal expenditures included, but were not limited to: mortgage payments on two houses, numerous lavish big game hunting trips and other vacations to Europe and South Africa, expensive retail purchases, and effectively all of the defendant’s daily living expenses.
DeMathews also used the investors’ money to satisfy monthly restitution payment obligations ordered in the amount of approximately $3.7 million related to a federal criminal case in the Central District of California, in which he was convicted of multiple counts of loan and credit application fraud in April 2000.
“Mr. DeMathews is responsible not only for wiping away the financial resources of many families—the effects of which will be felt for years to come—but also for causing profound levels of stress and emotional injury,” Acting U.S. Attorney Glassman said. “He preyed on vulnerable victims. For example, he induced a mentally incompetent woman to invest her engagement ring. Another victim was forced to surrender individual life insurance policies, before being diagnosed with cancer and learning that he did not have long to live and would be leaving his family with no means of financial stability.”
To carry out his most recent scheme, DeMathews fraudulently: created at least two shell companies; had business cards made; provided paperwork from foreign companies and governments that were written in different languages; continuously sent emails to the victims convincing them that he was traveling and working very hard to get the alleged projects secured; had others open bank accounts for him so that he never had any identifiable assets in his name; laundered victim money to pay his $200 monthly restitution obligation for his 2000 fraud conviction in the Central District of California; requested that Google suppress search results related to his prior federal convictions on similar charges so that his victims could not easily discover his past charges; advised victims that he was the President of DEMCO and doctored a letterhead to perpetrate his fraud and provided complex blueprints and similar documents to victims to convince them that he was working on specific projects.
He was indicted by a federal grand jury in March 2015 and pleaded guilty in March 2016.
Acting U.S. Attorney Glassman commended the investigation of this case by the FBI, and Assistant United States Attorney Jessica H. Kim, who is prosecuting the case.
