Two Former Columbia Men Plead Guilty to $3 Million Investment Fraud Conspiracy
|U.S. Attorney’s Office January 27, 2009|
JEFFERSON CITY, MO—John F. Wood, United States Attorney for the Western District of Missouri, announced that two former Columbia, Mo., men pleaded guilty in federal court today to participating in a $3 million investment fraud conspiracy.
William Colwell McNeely, 77, of Millersburg, Mo., and Craig F. Swoboda, 73, of Lake Ozark, Mo., pleaded guilty in separate hearings before U.S. District Judge Nanette K. Laughrey this morning to the charge contained in a Nov. 16, 2007, superseding indictment.
McNeely and Swoboda participated in a conspiracy to commit mail fraud and wire fraud from December 1997 through February 2006. McNeely and Swoboda were residents of Columbia at the time of the conspiracy. McNeely was president and chief operating officer of United Management, Inc. (UMI). Swoboda was the chief executive officer of UMI.
McNeely admitted that he formed UMI to solicit investments from persons, and sold what purported to be opportunities to purchase and participate in the development of vending machine-related inventions. Although investors were told that the product was ready for mass production, there were financial and technical setbacks that caused substantial delays and prevented the production and marketing of the product.
Victims invested up to $400,000 in the fraudulent scheme, with a total loss of $3 million. McNeely admitted that he used investor money for his own personal use and gain.
Co-defendant Gail M. Wilkerson, 62, of Denver, Colo., who was McNeely’s wife and secretary of UMI, pleaded guilty on Nov. 20, 2006, to her role in the conspiracy.
McNeely, Swoboda and Wilkerson used telephone, facsimile, Federal Express, U.S. mail and e-mail in order to conduct business, as well as instructing investors to wire funds to bank accounts, as part of the scheme to defraud investors. They made false and misleading statements in order to attract persons to invest. For example, investors were told that each of the defendants – and their families – had invested large sums of money toward the development of the vending machine-related inventions. Wilkerson falsely told investors that her father was a wealthy executive for Piper Aircraft who had left her a large inheritance.
McNeely, Swoboda and Wilkerson also omitted certain material facts that would have discouraged potential investors, such as the fact that McNeely and UMI were involved in pending lawsuits with existing investors and that few investors had gotten their investment back without filing a lawsuit.
McNeely and Swoboda made false and misleading statements about the extent of their and UMI’s financial worth, in order to attract persons to invest, including:
* that UMI was worth $150 million;
* that UMI had agreements with various companies to distribute the product;
* that the company shares were worth $5 per share;
* that a major bottler wanted to buy UMI for $1 per share; and
* that investors could get their money back if they were not happy.
Under federal statutes, each of the defendants is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation, the Missouri Secretary of State and the Missouri Attorney General’s Office.