U.S. Attorney Mark A. Totten | U.S. Department of Justice
Gifford “Chip” Cummings, Jr., former CEO of a Grand Rapids investment firm, has been sentenced to 66 months in federal prison. He is also required to repay $5,755,477 to victims after being found guilty of defrauding investor clients at Red Oak Capital. Following his prison term, Cummings will serve two years of supervised release.
U.S. Attorney for the Western District of Michigan Mark Totten commented on the case: “Mr. Cummings deliberately cheated investors out of hundreds of thousands of dollars for his personal gain.” Totten emphasized the seriousness of financial fraud and the commitment to prosecuting those responsible for causing financial harm.
Cummings admitted guilt in executing a fraudulent scheme while serving as President and CEO. In December 2019, he invested $5 million of client funds without authorization, which quickly depreciated in value. When confronted by business partners about this secret investment, Cummings falsified account statements to misrepresent its performance and created a fake document claiming he had attempted to recover the funds.
The firm managed to recover only $761,522.90 from the initial investment. Further investigation revealed that Cummings failed to repay a $1,350,000 debt and instead deposited the money into an account he controlled.
Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan, stated: “Today's sentencing... highlights the FBI's unwavering commitment to addressing both financial and cybercrimes.” Gibson praised the investigation led by the Detroit Field Office Cyber Task Force and Grand Rapids Resident Agency as crucial for securing a successful prosecution.
The Federal Bureau of Investigation conducted this case's investigation with Assistant U.S. Attorneys Davin Reust and Chris O’Connor handling prosecution duties.
