Montana Men Sentenced to Prison for Investment Fraud Scheme
|U.S. Attorney’s Office December 13, 2011|
RENO—Two Montana men who stole more than $16 million from approximately 1,400 victims through an online investment fraud scheme, were sentenced to prison today, announced the United States Attorney’s Office for the District of Nevada.
Richard Young, 52, of Lewistown, Montana, was sentenced to 25 years in prison, three years of supervised release, and ordered to pay $13.3 million in restitution. Young was convicted by a jury in March 2011 of one count of conspiracy to commit wire fraud and securities fraud, two counts of wire fraud, one count of money laundering, and one count of securities fraud. Young was also ordered to forfeit a bank account containing approximately $500,000, a towing company, and four houses in Lewistown, Montana.
Co-defendant William Willard, 68, of Bozeman, Montana, was sentenced to 15 months in prison, three years of supervised release, and ordered to pay $13.3 million in restitution. Willard pleaded guilty to conspiracy to commit wire fraud on February 25, 2011.
“As this case demonstrates, investors should be wary of opportunities that promote winning market trading records and above average rates of return,” said the case prosecutor, First Assistant U.S. Attorney Steven Myhre. “Investors should also be wary of investment “experts” who appeal to your personal status, such as your religious beliefs, need for financial security, and sense of belonging. Before providing any money to an individual or company, research their background and credentials, and verify their legitimacy. This sentence should send a clear message that investment fraud is a serious offense with serious consequences. This office will continue to investigate and prosecute cases of this nature.”
In early 2006, Young, with Willard’s assistance, formed an Internet-based company named Global One Group LLC (“Global One”). Global One initially was touted as a web-based forum to train individual investors to trade in the high-risk foreign currency exchange market, usually referred to as the Foreign Exchange Market, or FOREX. Young solicited membership fees from those who wished to join his training programs, which he conducted over the Internet and referred to as “webinars.” Young represented that he was a very successful FOREX trader who placed virtually no losing trades and could teach others to do the same.
The evidence showed that shortly after Global One’s inception, Young offered its members the chance to participate in a profit-sharing plan. Young promised that in return for contributions of money in thousand-dollar increments, Global One’s members would reap a share of the profits the company generated from FOREX trades placed by or on behalf of Global One members. The government argued at trial, that in reality the plan was a fraud and nothing more than a Ponzi scheme designed so Young could pay out proceeds masquerading as “profits,” when they were in fact the contributions paid by other duped participants.
The government’s indictment charged that Young and his co-conspirators fraudulently and deceitfully misrepresented the profits, profitability, and trading capability of Global One to induce its members to invest in Global One’s so-called profit-sharing program. Young concealed the scheme by inducing Global One members to place their money into FOREX broker accounts using the false pretense that their investments would be traded by an automated trader, “Global Trac,” which Young touted had historically produced winning trades over 95 percent of the time. Young pitched that his customers did not have to trade at all, but could simply turn control of their money over to Global One to trade for them through Global Trac. The government argued at trial that in truth, the automated trader never existed, and it was Young and others who were doing the trading.
The government’s evidence showed that the investors lost money in the high-risk FOREX market at an alarming rate. The government contended at trial that Young misled them about their losses, while he skimmed money from the profit-sharing program. The evidence at trial showed that Young raised about $16 million from approximately1,472 persons he duped into “investing” in his programs—and pocketed millions for himself in the process.
The investigation was conducted by IRS Criminal Investigation and the FBI. The case was prosecuted by First Assistant U.S. Attorney Steven W. Myhre and Assistant United States Attorney James E. Keller.