Santa Rosa Man Pleads Guilty to Wire Fraud, Money Laundering
|U.S. Attorney’s Office February 14, 2013|
SAN FRANCISCO—Douglas Dean Hollingsworth (aka Doug Hollingsworth) pleaded guilty in federal court in San Francisco yesterday to wire fraud and money laundering, United States Attorney Melinda Haag announced.
In pleading guilty, Hollingsworth admitted that from approximately June 2007 through approximately October 2012, he solicited money from numerous individuals by falsely representing that his business entities, Baytree Investors Inc. and Capsule Partners LLC, had developed a sophisticated computer system that permitted him to identify financial market trends and generate substantial profits from trading activity. Hollingsworth admitted that in soliciting money from the victims, he falsely stated that if they loaned him money, he could pay them significant monthly interest payments from the profits earned from successful trading activity. Hollingsworth, however, intentionally failed to tell some individuals from whom he solicited money that the Federal Bureau of Investigation had searched his residence in July 2010 and that he had been charged with wire fraud in August 2011. Hollingsworth admitted that he did not use the money received from the victims to engage in trading but instead spent the money on personal expenses (including, for example, purchasing jewelry) and to make monthly interest payments to other individuals who had provided him with money. Hollingsworth agreed that as a result of his scheme, he caused losses in an amount between $4 million and $7 million. In the plea agreement, Hollingsworth also agreed to forfeit approximately $80,000 that was in bank accounts seized in July 2010 during the course of the investigation. The defendant also agreed to pay restitution in an amount to be determined by the court, but not less than $3 million.
Hollingsworth, 64, of Santa Rosa, California, was originally indicted by a federal grand jury on August 16, 2011. On August 28, 2012 and December 18, 2012, the grand jury returned superseding indictments against Hollingsworth. In the most recent indictment, Hollingsworth was charged with two counts of mail fraud, in violation of 18 U.S.C. § 1341; 21 counts of wire fraud, in violation of 18 U.S.C. § 1343; and four counts of money laundering, in violation of 18 U.S.C. § 1957. Under the plea agreement, Hollingsworth pled guilty to one count of wire fraud and one count of money laundering.
The sentencing of Hollingsworth is scheduled for July 17, 2013, before Judge Charles R. Breyer in San Francisco. The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison and a fine of $250,000 or twice the gain or loss from the offense conduct and restitution. The maximum statutory penalty for money laundering, in violation of 18 U.S.C. § 1957, is 10 years in prison and a fine of $250,000 or twice the gain or loss from the offense conduct and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Denise Marie Barton and Tracie L. Brown are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Denise Oki, Rayneisha Booth, and Elizabeth Garcia. The prosecution is the result of an investigation by the Federal Bureau of Investigation.