The sentencing of a Virginia business man provides a sharp reminder to businesses and others offering investment opportunities to avoid making unsupportable promises or engaging in other communications or actions that could mislead investors.
Julius Everett “Bud” Johnson, 62, a resident of Richmond, Va., was sentenced today to 97 months in prison for his role in an investment scheme resulting in millions of dollars in losses, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia, Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Michael Morehart of the FBI Richmond Field Office. The sentencing follows Johnson’s April 11, 2011 guilty plea to one count of conspiracy to commit mail, wire and bank fraud and one count of engaging in unlawful monetary transactions. In addition to his prison sentence, Johnson also is expected to face a significant restitution obligation estimated to be approximately $8.9 million. The Justice Department charged in court filings that from July 2009 until at least March 2010, Johnson and a co-conspirator promised investors of returns within a period of one to four years of up to 10 percent to investors making investments that Johnson promised would be funneled directly into one a various specific companies that he owned and operated including Virginia Group Benefits (VGB); Mid-Atlantic Insurance (MAI); F.I.C. Financial Group Inc.; Benefit Contractors Administrators Inc. (BCA); River City Cleaners LLC; Roberts Awning LLC; Norvell Awning LLC; MHC Linen Services LLC; The Everett Group; and Living Well.
Rather than investing the monies collected as promised, the Justice Department charged that Johnson used a significant portion of the invested funds to repay other investors and to cover operating costs for unrelated businesses.
The conviction of Johnson resulted from the joint investigation and enforcement of the Department of Justice’s Financial Fraud Enforcement Task Force. The task force established by President Obama continues to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force operates to coordinate the efforts of the federal executive branch, and with state and local partners, to investigate, prosecute and punish significant financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
For Help With Monitoring Developments, Compliance, Investigations Or Other Needs
If you need assistance with fraud prevention and detection or other internal controls or compliance matters, the author of this update, attorney Cynthia Marcotte Stamer, can help.
Ms. Stamer has more than 24 years experience advising a broad range of public and private businesses, employee benefit plans and others about risk management and compliance, including the design and administration of corporate compliance and other management programs, internal investigations and discipline, dealing with governmental investigations and enforcement actions and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.
She regularly designs and presents risk management, compliance and other training for insurance, employee benefits, financial services, and a wide range of other organizations and their leaders. Ms. Stamer also regularly works with federal and state agencies, represents clients in dealings with these and other agencies, publishes and speaks extensively on regulatory and compliance, performance management, and other operations and risk management concerns.
A widely published author and speaker, her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, and a many other national and local publications.
You can get more information about Ms. Stamer and her other experience here. If you need help investigating or responding to a known or suspected compliance, litigation or enforcement or other risk management concern, assistance with reviewing, updating, administering or defending a current or proposed employment, employee benefit, compensation or other management practice, wish to inquire about federal or state regulatory compliance audits, risk management or training, or need legal representation on other matters please contact Ms Stamer here or at (469) 767-8872. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here.
©2011 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.