Allen Park Man Pleads Guilty to Defrauding Investors
| U.S. Attorney’s Office March 24, 2011 |
Barry Sparks, 53, of Allen Park, Michigan, pleaded guilty today to wire fraud and money laundering, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Erick Martinez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, and FBI Special Agent in Charge Andrew Arena.
According to court records, from 2006 through 2009, Stephen Sparks, 37, of Monroe, Michigan, and his uncle, Barry Sparks, took part in a scheme that solicited over $1 million from individual investors. Stephen Sparks represented to investors that his business, Global Points, had an opportunity to purchase a warehouse full of Chinese electronic equipment and sell it in the United States at a substantial profit, returning over five times the amount invested. Stephen Sparks also represented that Global Point was in a position for a second deal to acquire CD and DVD players that had been seized in Chicago, Illinois, and were being sold for the payment of back taxes. Stephen Sparks indicated that there would be a quick turn around and the profit would be twice the original investment.
Court records further showed that Stephen Sparks knowingly failed to inform the investors that he gave most of their money to his uncle, Barry Sparks, who had past criminal convictions for fraud. In furtherance of the scheme, Barry Sparks set up email accounts and transmitted messages to himself to make it appear as if he was negotiating overseas deals, when, in fact, Barry Sparks knew that there were no such deals or partners with whom he was negotiating. Stephen Sparks continued to provide excuses for the failure of the deals to close, and continued to solicit additional funds, claiming that the closings were imminent. In 2007, Stephen Sparks, aided by Barry Sparks, withdrew $12,000 in cash from his bank account knowing that these funds had been wired from Ohio to Michigan by an investor and, therefore, derived from the proceeds of wire fraud.
On January 25, 2011, Stephen Sparks pleaded guilty to wire fraud and money laundering charges and is expected to be sentenced on May 5, 2011 at 2:00 pm and Barry Sparks is scheduled to be sentenced on July 14, 2011 at 2:00 pm in front of United States District Court Judge Denise Page Hood.
The maximium sentence for wire fraud is 20 years’ imprisonment and a $250,000 fine and the maximum sentence for money laundering is 10 years’ imprisonment and a $250,000 fine.
“Investment fraudsters prey on trusting investors by enticing them with a can’t miss deal and then steal their hard earned money,” said Special Agent in Charge Erick Martinez. “IRS Criminal Investigation is committed to investigating investment schemes in an effort to protect the financial well being of the American investor.”
The case was investigated by special agents of the IRS Criminal Investigation and the FBI. It is being prosecuted by Assistant United States Attorney Ross I. MacKenzie.