WHEELING, WV - A bill of information charging Donna S. Brown, 65, of Clarington, Ohio with wire fraud, mail fraud and money laundering has been filed in U.S. District Court for the Northern District of West Virginia. Brown owns Budget Finance Company in New Martinsville, West Virginia.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Raymond P. Duda, Assistant Special Agent in Charge, Federal Bureau of Investigation (FBI), Pittsburgh Field Division; Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office; Tommy Coke, Inspector in Charge, U.S. Postal Inspection Service; West Virginia Attorney General Patrick Morrisey, West Virginia State Auditor and Securities Commissioner Lisa Hopkins; Commissioner Andrea Seidt of the Ohio Division of Securities; Acting Commissioner Dawn Holstein of the West Virginia Division of Financial Institutions; and Wetzel County Prosecutor Tim Haught announced the charges filed today.
The document charges Brown with one count each of wire fraud, mail fraud and money laundering. Each crime is punishable by a maximum sentence of 20 years in prison, a fine of up to $250,000, three years of supervised release and restitution to the victims of the crimes.
The document alleges that Brown owned and operated Budget Finance company which was both a licensed consumer loan company and an unlicensed investment company. Between 2005 and 2015, she lured potential investors into investing funds with Budget Finance by promising annual returns of between 8 and 12 percent.
Brown mailed checks to investors who requested periodic payments and sent them fraudulent quarterly investment statements reflecting their account balances and interest paid. She also mailed investors IRS 1099 forms, but never sent those forms to the IRS.
“Because no substantial investment source existed to account for well over 800 investment accounts with investments exceeding $31 million, she used money from new investors to pay the existing ones," U.S. Attorney Glassman said. “This type of scheme is known as a Ponzi scheme."
Budget Finance closed suddenly in November 2015.
A plea agreement was filed along with the Bill of Information, indicating that Brown will admit to the crimes. The plea agreement says the loss in this case is more than $9.5 million and less than $25 million. The crimes resulted in substantial financial hardship to 25 or more victims.
“For years, Donna S. Brown preyed upon investors and defrauded them out of their hard-earned money in order to support her personal lifestyle," said Special Agent in Charge Robert Johnson, of the FBI’s Pittsburgh Field Office, “As a result of the scheme devised by Brown, many of the victims in this case lost everything, including their livelihoods and the retirement savings they worked throughout their lives to secure. The FBI is committed to pursuing financial predators like Donna Brown, and her conviction today reflects the resolve of the FBI; IRS-Criminal Investigation; U.S. Postal Inspection Service; the U.S. Attorney’s Office, and our partners in state and local government in pursuing those who commit financial crimes and steal from trusting individuals."
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime," said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. "Ponzi schemes can thrive for a time on false claims but that time is gone. As today’s actions have shown, it's time for Donna Brown to be held responsible for her criminal actions. IRS Criminal Investigation is committed to using our financial expertise to identify and trace laundered funds that are used to perpetuate these types of investor fraud schemes."
“The U.S. Postal Inspection Service will continue to strongly pursue its mission of investigating Mail Fraud crimes and protecting the US Postal Service and its customers," said Tommy Coke, Inspector in Charge, U.S. Postal Inspection Service. “Today’s challenging economy deems it critical that consumers guard against losing their hard-earned assets to fraud. Relying on the reputation of a financial advisor or their relationship with a friend or family member, is not enough. Investors must still verify information, especially if there are claims of outperforming the market."
Glassman suggested victims monitor the progress of the case through the “Budget Finance Company, Inc." tab on the home page of the U.S. Attorney’s Office website (www.justice.gov/usao/ohs), or call the hotline established for victims, 866-532-9098.
U.S. Attorney Glassman commended the investigation of this case by the agencies and Assistant United States Attorney Daniel A. Brown and Deputy Criminal Chief Brenda Shoemaker, who are representing the United States in this case.
Source: U.S. Department of Justice, Federal Bureau of Investigation (FBI)
