Home San Francisco Press Releases 2010 Felton Man Pleads Guilty in Investment Fraud Scheme
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Felton Man Pleads Guilty in Investment Fraud Scheme
Gary Ray Bassett Stole More Than $850,000, Including Money Victim Intended to Use for Husband’s Cancer Treatment

U.S. Attorney’s Office February 08, 2010
  • Northern District of California (415) 436-7200

SAN JOSE, CA—Gary Ray Bassett pleaded guilty in federal court in San Jose this afternoon to wire fraud, United States Attorney Joseph P. Russoniello announced.

In pleading guilty, Bassett, 60, formerly of Felton, Calif., admitted that from approximately August 2004 through February 2006, he carried out a fraud scheme by which he induced victims to invest money based on promises that he would invest that money on their behalf. Instead, Bassett stole the money. 

Bassett admitted in the plea agreement that he raised more than $859,000 from more than 25 victims, but failed to invest any of that money as he had promised. He also admitted that he failed to provide the investors with the interest he had promised or to repay their principal. Instead, Bassett converted nearly $350,000 of the investors’ funds for his personal use and into cash. 

Bassett admitted in the plea agreement that he targeted victims that he knew were vulnerable. Bassett admitted stealing $165,000 from a woman who needed the money to pay for stem cell treatment for her husband who was suffering from leukemia. Bassett gained the victim’s trust, in part, by telling her that he too was suffering from cancer. Bassett guaranteed that if the victim invested with him, he would more than double her money so that she would be able to pay for her husband’s treatment. Instead, Bassett stole the money and never paid her anything. 

Bassett admitted in the plea agreement that he stole money from victims by falsely claiming to be acting on behalf of charitable or educational organizations. He lied to victims about having had a history of investing in humanitarian projects, real estate and hedge funds. Bassett defrauded one victim by convincing him that he would be investing in "products that would benefit all of mankind" such as alternative energy projects and low income housing. Bassett also falsely told other victims that investing with him would help them achieve their humanitarian goals such as helping underprivileged children or building a power plant at an Indian reservation. In reality, Bassett never actually invested any of the funds he received from victim-investors but instead always had intended to steal their money.

Bassett admitted in the plea agreement that he fraudulently told victim-investors that he would guarantee their investment principal while providing them rates of return as high as 8 to 15 percent a month. Bassett also fraudulently told investors that 100 percent of their money would be used for investment purposes and that he was engaging in financial practices such as "institutional trading." Instead, Bassett spent all the money he received from victims on personal expenditures for himself, his friends, and on expenses that had nothing to do with any victim investments.

Bassett admitted in the plea agreement that the total loss from his investment fraud was more than $859,000.

Bassett was originally charged in an indictment filed under seal in San Jose federal district court on Dec. 4, 2008, and unsealed on May 4, 2009. He was charged with 10 counts of wire and mail fraud. Under the plea agreement, Bassett pled guilty to two counts of wire fraud. Bassett was originally arrested on May 1, 2009, in Harlingen, Texas, pursuant to a sealed arrest warrant, and has subsequently been detained in custody as a flight risk. 

The sentencing of Bassett is scheduled for April 19, 2010, at 1:30 p.m. before U.S. District Court Judge James Ware in San Jose. The maximum statutory penalty for each count of wire fraud in violation of Title 18, United States Codes, Section 1343 is 20 years in prison and a fine of $250,000, plus restitution.

Joseph Fazioli is the Assistant United States Attorney who is prosecuting the case with the assistance of Legal Assistants Kamille Singh and Jeanne Carstensen. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service.

Further Information:

Case #: CR 08-00865 JW

A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney’s Office should be directed to Jack Gillund at (415) 436-6599 or by email at Jack.Gillund@usdoj.gov.

This site does not contain all press releases or court filings and is not an official record of proceedings. Please contact the Clerk of Courts for the United States District Court for official copies of documents and public information.

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