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Press Release

Former Chief Financial Officer Sentenced to 33 Months in Federal Prison for $2,400,000 Investment Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Eastern District of Wisconsin

United States Attorney Richard G. Frohling announced that on May 19, 2022, Jeremy Arrington (age: 44) of Middleton, Wisconsin, was sentenced to 33 months in federal prison for carrying out a $2.4 million investment scheme that defrauded over 20 victims. Arrington had earlier pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343.

The information presented at sentencing showed that Arrington partnered with another individual to form a real estate business, Wisconsin Home Buyers Network, LLC (WIHBN), of which Arrington was the Chief Financial Officer. Between 2012 and 2017, the partners solicited and obtained from more than 20 investors approximately $2.8 million, promising little or no risk and healthy monetary returns ranging from 12% to 36%. In return, investors received promissory notes signed by Arrington detailing the investment terms. Some investors also received mortgages that purported to be for specific properties to be acquired and rehabilitated with the investors’ funds, although the partners failed to record all but a few of the mortgages.

Contrary to promises that the investor funds were secured by the assets of a successful and profitable business, WIHBN had business debt, delinquent tax obligations, and other financial issues that made the business unable to timely make payments on the promissory notes. Rather than being used for the promised investment purposes, investor funds were comingled with other funds and were used for Ponzi-type payments to existing investors, payroll for related businesses, debt reduction, personal draws by the partners, back taxes, and legal fees. When the partners were unable to pay as the promissory notes came due, they sought extensions, solicited additional funds from existing investors, and attempted to secure new investors. In the end, less than $400,000 of the over $2.8 million in investor funds was returned to investors.

Several victims filed impact statements with the court prior to sentencing. One victim made in-person remarks during the sentencing hearing, explaining how Arrington caused significant financial and emotional harm. Some investors lost funds that they had been saving for retirement. In pronouncing sentence, U.S. District Court Judge Brett H. Ludwig commented that the protracted nature of Arrington’s conduct and the magnitude of the loss required a sentence that both punished and deterred.

“Mr. Arrington’s conduct resulted in individuals losing their retirement savings and their sense of security and well-being,” said U.S. Attorney Frohling.  “Along with our federal, state, and local partners, the United States Attorney’s Office remains committed to holding individuals who engage in these types of schemes accountable for their actions and to pursuing justice for their victims.  Today’s sentence is a direct result of the excellent collaborative work of the agents from the FBI and the Department of Labor’s Employee Benefits Security Administration.”

“The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs and prosecuting those that fail to comply with the law. EBSA will continue to work aggressively with our law enforcement partners to stop the financial harm caused by these types of schemes.” said Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.

This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Employee Benefits Security Administration. Assistant U.S. Attorneys Carol L. Kraft and John P. Scully prosecuted the case.

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For further information contact: Public Information Officer Kenneth Gales

(414) 297-1700

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Updated May 20, 2022