‘Investment Advisory Firm’ Owner Sentenced to Federal Prison
|U.S. Attorney’s Office April 24, 2014|
GALVESTON—Kimberly Fontenot, a Brazoria County resident, has been ordered to federal prison following her conviction of defrauding clients of her so-called investment advisory firm, Stellar Grants Inc., announced United States Attorney Kenneth Magidson. Fontenot, 53, entered a plea of guilty Thursday, December 5, 2013.
Today, U.S. District Judge Gregg Costa cited the need for the sentence to reflect the seriousness of the offense and to deter criminal conduct and ultimately handed Fontenot a total sentence of 37 months, to be immediately followed by three years of supervised release. She was further ordered to pay a $115,115 in restitution. In handing down the sentence, Judge Costa further noted there were more than 20 victims affected by the complex wire fraud and identity fraud scheme.
As outlined in documents filed with the court and admitted by Fontenot at the time of her plea, from at least January through December 2012, Fontenot lured potential clients by falsely claiming to know numerous wealthy investors located throughout the U.S. 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.
Fontenot was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney John Pearson.