Two Dallas-Area Residents Admit Defrauding Investors in Gold Purchase Scheme
Defendant Arrested at JFK International Airport Just Prior to Boarding Flight to Ghana
|U.S. Attorney’s Office January 31, 2014|
DALLAS—Two recent Dallas-area residents, Annetta Lou Smith, aka “Annette Crawford,” 49, and Warren Michael Hills, 54, have each pleaded guilty to conspiracy to commit wire fraud stemming from a gold purchase investment fraud scheme they ran in November and December 2010. Hills pleaded guilty yesterday before U.S. District Judge Reed C. O’Connor to count one of the indictment and was remanded into federal custody. Smith entered her plea earlier this month to a superseding information. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to documents filed in the case, on August 27, 2013, Smith was informed that an indictment charging her and Hills with fraud would be presented to a federal grand jury in Dallas the following week. On Sunday evening, September 1, 2013, Smith was arrested on a criminal complaint by FBI agents at JFK International Airport, where she was awaiting a flight she had booked to Ghana, which was scheduled to depart later that evening. She has been in custody since that time.
According to plea papers filed in the case, Smith and Hills worked together to recruit investors to purchase gold from the country of Ghana, located in West Africa. Smith and Hills represented to two particular investors that if these investors wired their funds to a specific bank account in Ghana and then they would cause the promised (and paid for) gold to be shipped to the investors. These two particular investors suffered substantial financial losses as a direct result of the failure of Smith and Hills to cause all the promised gold to be delivered to them.
Although both Smith and Hills knew that the investors had fully paid for all of their promised gold, they also knew that all the promised gold was ultimately not shipped and was never going to be shipped to them. Rather than be truthful to the investors, Smith and Hills made false representations to them promising the remaining gold would be shipped.
According to the indictment, Smith and Hills caused substantial monetary losses to investors, including approximate total net losses of $113,483 to investor P.G. and approximately total net losses of $325,000 to investor M.W.
Hills faces a maximum statutory penalty of 20 years in federal prison, and Smith faces a maximum statutory penalty of five years in federal prison. Each could also be fined up to $250,000 and ordered to pay restitution. Judge O’Connor will sentence Hills on May 15, 2014, and Smith on April 24, 2014.
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 is 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case is being investigated by the FBI. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.