FBI Arrests Dallas Man on Wire Fraud and Mail Fraud Charges
Defendant Allegedly Defrauded 200 Victims of $1 Million in Advance Fee Scheme

DALLAS—Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Dallas, was arrested yesterday at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Molz made his initial appearance this afternoon before U.S. Magistrate Judge Renée Harris Toliver who ordered him detained pending a detention hearing set for 2:00 p.m., tomorrow, September 10, 2010.

According to the affidavit filed with the criminal complaint, which was unsealed today, Molz, using the name of Frank Sullivan, represented himself to be the Chief Financial Officer of 3rd Street Financial, LLC, a Texas Limited Liability Company that Molz formed in August 2009. He offered for sale “aged corporations” that Molz claimed 3rd Street Financial had established and maintained over the course of several years. Victims were told that 3rd Street Financial stated that they had incorporated multiple corporate entities four to five years ago and had a proprietary process for building up the credit scores of those corporate entities. Molz claimed that the 3rd Street Financial process resulted in building up the reputation and credit scores of the corporate entities. Molz offered to sell the corporate entities to small business owners needing access to bank lines of credit, who could then draw out the entire line of credit. None of the victims ever received access to any bank lines of credit.

Molz offered different levels of participation in his scheme. For an advance fee of $3250, a Tier 1 corporation could be purchased which would have access to $150,000 to $250,000 in bank lines of credit. For an advance fee of $6500, a Tier 2 corporation could be purchased which would have access to $250,000 to $400,000 in bank lines of credit.

To perpetuate his fraud, clients were sent a service agreements including fraudulent bank line of credit letters, false testimonials, and a Q&A sheet containing numerous misrepresentations. Molz advertised on his website that it would take an average of 10 weeks for the corporation to become available to the client and offered a 100 percent money back guarantee if the client didn’t receive their corporation after 12 weeks.

The investigation has revealed that client deposits began on November 12, 2009, and ended approximately on May 24, 2010, with most of the deposits occurring from January through March 2010. Total client deposits identified were $1,005,040. The complaint alleges that Molz used investor money to support a lavish lifestyle of travel, entertainment, and nightclubs. He also used investor funds to purchase a 40-foot Silverton boat, a 2007 Chevrolet Corvette, a home in Irving, Texas, a 2007 BMW 650, a 2005 Maserati, and a 2007 Lamborghini Murcielago.

A federal complaint is a written statement of the essential facts of the offenses charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The penalty, however, for a wire fraud conviction or a mail fraud conviction, is 20 years in prison and a $250,000 fine, per count. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The matter is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Christopher Stokes.