‘Investment Advisory Firm’ Owner Convicted of Fraud
|U.S. Attorney’s Office December 05, 2013|
GALVESTON—Kimberly Fontenot, a Brazoria County resident, has been convicted of defrauding clients of her so-called investment advisory firm, Stellar Grants Inc., announced United States Attorney Kenneth Magidson.
As outlined in documents filed with the court and admitted by Fontenot during her guilty plea today, from at least January through December 2012, Fontenot lured potential clients by falsely claiming to know numerous wealthy investors located throughout the United States. She offered access to these wealthy investors, whom she called her “angel investors,” to potential Stellar Grants clients in exchange for money. Specifically, Fontenot misrepresented that in exchange for money, she could put Stellar Grants clients in contact with the angel investors and would help them seek investments from the angel investors.
In addition to claiming personal and business relationships with them, Fontenot used the web-based e-mail services Yahoo.com and Gmail.com to create fake e-mail accounts in the names of the investors. She used these accounts to send e-mails to Stellar Grants clients, making it seem as if the e-mails were coming to and from the angel investors when, in reality, they were coming from Fontenot.
Fontenot also hired a voice actor to impersonate the angel investors or their representatives during telephone calls with Stellar Grants clients. She also instructed the actor how to act and what to say during the calls. Fontenot then held fake conference calls in which she pretended to represent the Stellar Grants client and the voice actor pretended to be the angel investor or a representative of the angel investor, all in an attempt to justify the consulting fees paid by the Stellar Grants clients.
To avoid detection, Fontenot arranged for Stellar Grants clients or their representatives to sign “Master Consulting Agreements.” These agreements included a penalty clause that imposed heavy financial penalties if the clients contacted any of the angel investors.
U.S. District Judge Gregg Costa accepted Fontenot’s plea and has set sentencing for February 24, 2013. At that time, she faces a maximum penalty of 20 years in federal prison and a $250,000 maximum fine or twice the pecuniary gain or loss. She was permitted to remain on bond pending that hearing.
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney John Pearson.