Investment Fraud: Three Texas Residents Indicted Of Conspiracy to Commit Wire Fraud and Three Counts of Wire Fraud

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Investment Fraud

<h2>Federal Grand Jury Indicts Three in &dollar;6&period;5 Million Diamond Investment Fraud Scheme<&sol;h2>&NewLine;<p><strong>DALLAS<&sol;strong> — A federal grand jury in Dallas has indicted three Texas residents on various charges stemming from their involvement in a diamond investment scheme they ran from approximately March 2011 to November 2013&comma; announced U&period;S&period; Attorney John Parker of the Northern District of Texas&period;<&sol;p>&NewLine;<p>Defendants Craig Allen Otteson&comma; 64&comma; of McKinney&comma; Jay Bruce Heimburger&comma; 58&comma; of Dallas&comma; and Christopher Arnold Jiongo&comma; 55&comma; of Houston&comma; surrendered to federal authorities on Friday morning&comma; September 9&comma; 2016&comma; and made their initial appearances that afternoon before U&period;S&period; Magistrate Judge David L&period; Horan&period;  Each was released on bond&period;<&sol;p>&NewLine;<p>Specifically&comma; the 10-count indictment charges each defendant with one count of conspiracy to commit wire fraud and three counts of wire fraud&period;  In addition&comma; Otteson and Heimburger are each charged with six counts of mail fraud&period;<&sol;p>&NewLine;<p>According to the indictment&comma; Otteson acted as the Managing Member and Chief Compliance Officer of Stonebridge Advisors&comma; LLC&comma; located on Belt Line road in Dallas&period;  Stonebridge Advisors was involved as the Managing Partner of Worldwide Diamond Ventures&comma; L&period;P&period;&comma; located at 6029 Belt Line in Dallas&comma; and it acted as the General Partner of Worldwide Diamond&period;  Heimburger acted as a Principal Partner of Worldwide Diamond&comma; and he was also listed as the registered agent and Director of JBH Securities&comma; Inc&period; located on San Rafael in Dallas&period;  JBH Securities was primarily involved in the business of providing investment advice&period;  Worldwide Diamond was primarily involved in the business of buying and reselling diamonds on the international market&period;  On October 1&comma; 2013&comma; Worldwide Diamond filed for bankruptcy in the Northern District of Texas&period;<&sol;p>&NewLine;<p>According to the indictment&comma; the defendants initially attempted to raise funds for their new business of purchasing and reselling diamonds by offering the sale of additional limited partnerships&comma; in the minimum amount of &dollar;100&comma;000&comma; in Worldwide Diamond&comma; but were unable to raise sufficient capital funds in this manner&period;  Then&comma; in March 2011&comma; defendants attempted to raise additional needed start-up funds by offering &OpenCurlyDoubleQuote;Non-Recourse Promissory Notes” &lpar;diamond notes&rpar;&period; The defendants hired three outside companies to market and sell the diamond notes to investors in Texas&comma; Pennsylvania and California&period;  Each &dollar;50&comma;000 diamond note had a nine-month maturity date and an 8&percnt; rate of return&period;<&sol;p>&NewLine;<p>The indictment alleges that from approximately March 2011 through November 2011&comma; Otteson&comma; Heimburger and Jiongo defrauded their first round of investors when they fraudulently concealed material information from them&comma; including how they used investor funds&comma; and other information&comma; which caused 57 investors to invest a total of &dollar;5&comma;141&comma;699 with Worldwide Diamond Ventures&period;<&sol;p>&NewLine;<p>The indictment further alleges that from February 2012 through May 2013&comma; Otteson and Heimburger defrauded the second round of investors when they fraudulently concealed material information from investors&comma; including how they used investor funds and other information&comma; which caused 20 new investors to invest a total of &dollar;1&comma;333&comma;000 with Worldwide Diamond Ventures&period;<&sol;p>&NewLine;<p>Defendants promised investors that all investor funds would only be used to purchase and resell diamonds&period;  However&comma; as part of the fraudulent scheme&comma; the defendants concealed from investors that defendants used nearly &dollar;2&period;5 million of investor funds to make unauthorized loans to third parties&period;  As a result of the defendants’ investor fraud scheme&comma; these 77 investors sustained a total loss of at least &dollar;4&comma;922&comma;811&period;<&sol;p>&NewLine;<p>An indictment is an accusation by a federal grand jury&comma; and a defendant is entitled to the presumption of innocence unless proven guilty&period;  However&comma; if convicted&comma; the maximum statutory penalty for <em>each<&sol;em> of the counts charged in the indictment is 20 years in federal prison and a &dollar;250&comma;000 fine&period;  The indictment also includes a forfeiture allegation that would require the defendants&comma; upon conviction&comma; to forfeit the proceeds obtained as a result of the offense&period;  Restitution could also be ordered&period;<&sol;p>&NewLine;<p>This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas&period;  Twenty defendants have been charged as part of that initiative&semi; 16 were convicted&comma; one resulted in a mistrial and three are pending trial&period;<&sol;p>&NewLine;<p>The U&period;S&period; Postal Inspection Service is conducting the investigation&period;  Assistant U&period;S&period; Attorney David Jarvis is in charge of the prosecution&period;<&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;usao-ndtx&sol;pr&sol;federal-grand-jury-indicts-three-65-million-diamond-investment-fraud-scheme">Original PressReleases&&num;8230&semi;<&sol;a><&sol;p>&NewLine;

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