Former Financial Advisor Charged with Defrauding Investors of at Least $2 Million
| U.S. Attorney’s Office November 22, 2010 |
FRESNO, CA—Jesse Alvin Cripps Sr., 57, previously of Visalia, California, surrendered to the FBI this morning in Dallas. He is charged with 27 counts of mail fraud and three counts of money laundering, U.S. Attorney for the Eastern District of California Benjamin B. Wagner announced today. A federal grand jury in Fresno, Calif., returned the indictment on Nov. 10, 2010. Cripps and will appear before the magistrate judge today in Dallas. He is scheduled to appear in Fresno before U.S. Magistrate Judge Gary S. Austin on Dec. 8, 2010.
The indictment alleges that between July 2001 and June 2008, Cripps, who was working as a financial advisor, devised a scheme to defraud investors through various means, using his church contacts to solicit individuals to invest money with him. In most instances, Cripps offered individuals an opportunity to purportedly invest in a real estate investment trust (REIT). The indictment alleges that Cripps told investors that the REIT fund was an investment group for real estate in either Nevada or California, that the REIT fund was secured by the property, that they would earn typically 10 to 12 percent interest per month, and that if the investment did not work out, the investor would still own the property and could sell it. The indictment alleges that as a result of Cripps’s false and fraudulent statements, investors gave him money to invest in the purported real estate investment trusts. Instead of investing, Cripps used the money for his own business and personal expenses.
The indictment also alleges that as part of his scheme to defraud, Cripps would periodically send the investors statements showing the purported progress of their investments and the interest earned to date. The defendant would also use investors’ money to pay interest amounts owed to other investors. The indictment alleges that both the periodic payments and statements lulled the investors into believing the legitimacy of their investments, brought in new investors, and avoided reporting to and detection by law enforcement.
In addition to the mail fraud charges, the indictment also charges Cripps with money laundering. After depositing the investors money into his accounts, Cripps made cash withdrawals in amounts greater than $10,000 and wired $25,000 overseas to his account in Gibraltar. As a result of his scheme, Cripps obtained at least $2 million from investors, many of whom lost their entire life savings and retirement.
If convicted, Cripps faces a maximum statutory penalty of 30 years in prison for each count of mail fraud, a $250,000 fine and up to five years of supervised release following incarceration. The maximum statutory penalty for international money laundering is 20 years in prison, a $500,000 fine and up to three years of supervised release following incarceration, and the maximum statutory penalty for money laundering proceeds in amounts greater than $10,000 is 10 years in prison, a $250,000 fine, to be followed by three years of supervised release.
The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the FBI. Assistant U.S. Attorney Michele Thielhorn is prosecuting the case.
This law enforcement action is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). 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. One component of the FFETF is the national Securities Fraud Working Group, which is tasked with combating investment fraud schemes. For more information on the task force, visit www.stopfraud.gov.