Michael Benton Sullivan Sentenced in U.S. District Court
|U.S. Attorney’s Office December 03, 2010|
The United States Attorney’s Office announced that during a federal court session in Missoula, on December 3, 2010, before U.S. District Judge Donald W. Molloy, MICHAEL BENTON SULLIVAN, a 61-year-old resident of San Diego, California, appeared for sentencing. SULLIVAN was sentenced to a term of:
- Prison: Five months
- Special Assessment: $100
- Restitution: $159,750
- Supervised Release: Three years
SULLIVAN was sentenced in connection with his guilty plea to conspiracy to commit fraud.
In an Offer of Proof filed by Assistant U.S. Attorney Ryan M. Archer, the government stated it would have proved at trial the following:
William Marlin and Tyrone Dyse were previously convicted and sentenced for participating in a scheme and conspiracy to defraud by operating a telemarketing boiler room scam under the business name “Children Family Films” (CFF). CFF consisted of several individuals who would cold call investors and try to sell them investment shares in CFF. The callers adopted aliases and posed as former investors in order to convince new investors to pay money into the scheme.
Marlin and other boiler room operators typically promised investors that they would receive 100 percent of their investment back in three months and then they would receive thousands per month for one-three years afterwards, depending on the amount of the initial investment. Investors were told that companies like HBO and Disney would purchase CFF movies and play those movies on their station. In turn, the companies would allegedly pay CFF for the movies and the profit would be passed on to CFF investors.
In reality, this never happened. CFF never had any contracts with Showtime, HBO, Disney or any other media or cable television company. CFF never received any payment from any of these companies. Marlin has admitted that CFF was a fictitiously named company that never produced a film, product, video or any other media. Not one investor was ever paid a return on their investment. And CFF investments were instead used for Marlin’s own personal benefit, for the benefit of the other boiler-room co-conspirators, and to pay expenses required to perpetuate the scheme.
In April of 2007, a caller from CFF contacted E.J. in Bozeman. He told her that CFF produced B movies in the child film industry and sold them to HBO, STARZ and other stations. Identifying himself as “Mike Larson”, the CFF caller guaranteed E.J. that a $20,000 investment would generate a return of five to one, and an $1,800 per month payment for 36 months following the return of the initial investment. This ultimately convinced E.J. to invest $20,000 in CFF, and provide additional “investment” funds from other Montanans. During the course of investigating CFF and Marlin’s activities, one investor identified SULLIVAN as calling him directly and soliciting an investment. Another investor identified a “Mike Larson” as calling him from a cell phone number which was registered by Verizon to SULLIVAN.
When Marlin was arrested, he provided statements to the FBI and said that SULLIVAN was one of the callers for CFF and knew he was deceiving investors when soliciting money from them.
Marlin advised that SULLIVAN made the calls from his residence in San Diego, California, with the use of his cell phone. He said SULLIVAN’s primary alias was “Mike Larson.” Marlin stated that E.J. was one of several investors that SULLIVAN initially contacted. SULLIVAN would also pose as a doctor or real estate broker and claim to be a satisfied investor in order to convince victims to invest in the scheme. Ultimately, Marlin said that SULLIVAN, along with Dyse and others, received a percentage of the fraud proceeds involved in CFF. The FBI tracked over $60,000 in fraud proceeds to SULLIVAN. Bank records revealed that the checks were sent and endorsed by SULLIVAN.
Because there is no parole in the federal system, the “truth in sentencing” guidelines mandate that SULLIVAN will likely serve all of the time imposed by the court. In the federal system, SULLIVAN does have the opportunity to earn a sentence reduction for “good behavior.” However, this reduction will not exceed 15 percent of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service.