Serial Fraudster Sentenced to Eight Years in Prison for Business Fraud Scheme
BALTIMORE, MD—U.S. District Judge Richard D. Bennett sentenced Curtis R. Martin, Jr., age 55, of Baltimore, Maryland, today to eight years in prison, followed by three years of supervised release, for wire fraud. Martin previously pleaded guilty a scheme to defraud a business of more than $132,000. At today’s sentencing hearing the government presented evidence of additional fraud schemes committed by Martin and Judge Bennett found that the total loss as a result of Martin’s fraud schemes was $1,572,195. Judge Bennett entered an order requiring Martin to pay restitution in the full amount of the loss, $1,572,195. In addition, Judge Bennett ordered that Martin perform a total of 300 hours of community service during his supervised release—100 hours each year.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
According to his plea agreement, while Martin was serving the final portion of a 162-month federal prison sentence at a halfway house in Maryland in the summer of 2010, he incorporated Oledix Technologies, LLC. Martin assumed the positions of President and Chief Executive Officer (CEO) of Oledix. On December 23, 2010, Martin was released from the halfway house and began serving a three-year term of supervised release. In the fall of 2011, Martin acquired office space for Oledix Technologies in downtown Baltimore, and began hiring employees. Oledix operated from this space until it was evicted for non-payment of rent at the end of June, 2012.
Martin represented that Oledix Technologies was in the business of selling video teleconferencing equipment that employed LED touchscreen technology, and that The Oledix Store was a retail outlet for Oledix Technologies. In fact, neither company did any significant amount of business. It’s operations in 2011—2012 were largely funded by money provided by a woman with whom Martin was romantically involved; by charges incurred on corporate credit cards obtained by Martin; and by financing obtained by Martin on behalf of Oledix from financing and leasing companies, including New Century Financial. New Century Financial (NCF) is a Texas company in the business of accounts receivable financing. Accounts receivable financing permits a business to obtain loans from a lender or financing company based upon outstanding invoices issued to customers, but for which payment is not yet due under the terms of the invoice. An accounts receivable financing company agrees to provide financing that is less than the full face value of the invoice. The business receiving the financing instructs its customer to make the payment owed on the invoice to the financing company, which retains the difference between the amount financed and the full face value of the invoice as its profit.
According to the statement of facts, on April 11, 2012, Martin submitted an on-line application for financing to NCF which falsely represented and inflated the monthly sales of Oledix Technologies. In support of the financing application, Martin submitted additional fraudulent documents, including bank statements, financial reports, and sales summaries, that presented a false and misleading picture of the financial position of Oledix Technologies.
In June 2012 he submitted a further request for financing to NCF and provided NCF with a fraudulent invoice which falsely represented that Oledix Techologies had sold Johns Hopkins Hospital/Hopkins Medical Center three “Oledix mobile telemedicine carts” at a cost of $174,200. In August 2012, Martin submitted an additional fraudulent invoice to NCF claiming that Hopkins had purchased an additional six “Oledix Mobile Telemedicine Carts” for a total price of $332,550. In fact, Oledix Technologies had not sold any equipment to Johns Hopkins Hospital or Hopkins Medical Center. To carry out the scheme, Martin sent or caused to be sent to NCF fraudulent e-mails, purporting to be from a Hopkins doctor and from a Hopkins account manager, which falsely confirmed the validity of the Hopkins invoices.
Martin admitted that, based on his fraudulent representations, NCF provided a total of $132,470 to Martin for the invoices purportedly issued to Johns Hopkins. Martin used the money for personal and business-related expenses.
The government presented evidence today that on May 4, 2012, NCF provided an additional $80,000 in financing to Martin based upon a fraudulent invoice Oledix had purportedly issued to Company 1. Judge Bennett found that not only did Martin defraud NCF of the $80,000, but based on evidence presented by the government, Martin committed other frauds involving eight individual victims and entities, with losses totaling $$1,492,195.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked the U.S. Probation Office for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the case.