PHOENIX—On June 29, 2015, Vernon Smith, 53, of Phoenix, Ariz. was sentenced by U.S. District Judge Susan R. Bolton to 144 months in federal prison on fraud charges and ordered to pay restitution to the victims. Earlier this year, Smith pleaded guilty to committing wire fraud by defrauding six Arizona investors out of approximately $229,000 in a variety of investment scams. When Smith committed these crimes, he was on supervised release in a second federal fraud case prosecuted in Oregon and on probation for a third fraud case prosecuted by the State of Arizona.

“The U.S. Attorney’s Office is committed to protecting the investing public from fraud, particularly from serial financial predators like Vernon Smith. This lengthy sentence should serve as a strong deterrent to others who would defraud the public,” stated United States Attorney John Leonardo. Mr. Leonardo thanked the FBI for their hard work and dedication through the course of the investigation and prosecution. “The number of victims and losses would have increased exponentially if the FBI hadn’t detected the criminal activity and acted quickly to end it,” stated Mr. Leonardo.

From October of 2013 to June of 2014, Smith—then a two-time convicted felon with no legitimate financial education or experience—posed as a wealthy, retired investment banker, residing in a 10,000 square foot Scottsdale home and driving an Aston Martin Vantage. He convinced six Phoenix-area victims to invest in either an African gold-mine venture or foreign bonds, both bogus investments. He used the victims’ money to support his lavish lifestyle and, at times, he used later victims’ money to make payments to earlier victims. Smith ultimately attempted to defraud an FBI undercover operative, and he was indicted and arrested in August of 2014. After serving his 144-month and 7-month federal prison sentences, Smith faces probation revocation proceedings and prison time in state court arising out of a state court conviction for fraud he committed in 2002.

The investigation in this case was conducted by the Phoenix Division of the Federal Bureau of Investigation. The prosecution was handled by Monica Klapper, Assistant U.S. Attorney, District of Arizona, Phoenix.