Tuesday, September 20, 2011

Leawood, Kan., Attorney and a Real Estate Speculator Plead Guilty to $52 Million Ponzi Scheme


Source- http://www.fbi.gov/stlouis/press-releases/2011/kansas-attorney-british-real-estate-speculator-plead-guilty-to-52-million-ponzi-scheme?utm_campaign=email-Immediate&utm_medium=email&utm_source=st-louis-press-releases&utm_content=32516

KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that a Leawood, Kan., attorney and a real estate speculator in the United Kingdom pleaded guilty in federal today to their roles in a fraud conspiracy that stole more than $52 million from their victims.

James Scott Brown, 66, of Leawood, and Derek J. Smith, 67, of Oxfordshire in the United Kingdom, pleaded guilty in separate appearances in the U.S. District Court in St. Louis, Mo., before U.S. Chief District Judge Linda R. Reade, Northern District of Iowa, to the charges contained in an April 28, 2011, federal indictment.

Brown and Smith each pleaded guilty to participating in a conspiracy to commit wire and mail fraud. During a 10-year period from 2000 to 2010, investors in the United States loaned a total of $52.5 million to Smith and co-conspirators through a Ponzi scheme that was known as the British Lending Program (BLP). Victims believed they were loaning money for legitimate real estate development projects, but in reality, most of their money was kept by co-conspirators (or used to pay interest and principal to other lenders).

Brown, an attorney, practiced law in England for several years prior to 2000. Brown also participated in the UMKC program at Oxford University. Between 2000 and 2010, Brown did not actively practice law; instead, Brown’s primary occupation was the BLP, from which he took substantial fees. Brown did business as British American Group and as J. Scott Brown and Associates.

Smith was a structural engineer and a business and real estate speculator/developer who resided near London, England. Smith did business as Princess Hotels Management and as Distinctive Properties. Smith was previously successful, but during the 1990s he acquired distressed hotel properties which were not profitable due to a recession in the English real estate market. By the end of the 1990s, Smith was in need of capital to maintain his ownership of several small hotels which were not trading profitably and to support his retention of several options to purchase land.



************************************************************************
Report Securities Fraud by Calling 1-888-482-6825 or by visiting
www.reportsecuritiesfraud.net 
 

No comments:

Post a Comment