Financial Fraud: Paul David Ward Indicted For Investment Fraud Scheme
JEFFERSON CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that the former owner of a fixed base operation at the Lebanon, Mo., airport has been indicted by a federal grand jury for a $707,000 investment fraud scheme.
Paul David Ward, 61, of Camdenton, was charged with wire fraud in an indictment returned by a federal grand jury in Jefferson City, Mo., on Wednesday, Aug. 9, 2017.
Ward was the owner of Lebanon Aviation Service, Inc., which provided services to the users of the Lebanon airport, including the sale of aviation fuel, through a contract with the city of Lebanon. Ward purchased aviation fuel for his business from Avfuel Corporation, located in Ann Arbor, Michigan. In October 2014, Ward surrendered his contract with the city of Lebanon to sell aviation fuel at the airport. At that time, Ward was suffering monthly losses of $6,000 or greater.
The federal indictment alleges that, from Jan. 1, 2011, to Aug. 22, 2016, Ward engaged in a scheme to defraud friends and associates who invested in his company. Ward falsely and fraudulently claimed he would use the solicited investments in Lebanon Aviation Service, the indictment says, but he actually used the solicited investments for personal expenses and to make Ponzi-style payments to previous investors. In total, according to the indictment, Ward defrauded approximately 25 investors in Camden, Laclede and Cole Counties who suffered actual losses of approximately $264,720.
Ward solicited his friends and associates to invest in Lebanon Aviation Services. At various times, the indictment says, Ward falsely claimed that he needed additional capital to purchase aviation fuel, needed capital to purchase pleasure boats for resale, and that he needed capital for undisclosed purposes. Ward continued to solicit investments after Lebanon Aviation Services was dissolved by the Missouri Secretary of State in January 2015.
At the time of the investment, Ward provided the investor with a post-dated bank check in the amount of the principal plus interest. In most cases, when the investment became due and payable, the investor deposited the post-dated check, but the check was returned for insufficient funds. When an investor complained to Ward about the returned check, the indictment says, Ward falsely stated a reason for the returned check and provided a series of false excuses for the failure to pay to lull the investor and gain more time to repay the investor. Ward generally attempted to repay investors who threatened to tell his wife about his failure to repay the investment. When Ward’s attempts to stall an investor failed, he solicited additional investments for the purpose of paying off a previous investor.
The indictment also contains a forfeiture allegation, which would require Ward to forfeit to the government any property derived from the proceeds of the alleged offense, including a $264,720 money judgment.
Larson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt.
This case is being prosecuted by Assistant U.S. Attorney Ashley S. Turner. It was investigated by the FBI and the Missouri State Highway Patrol.