Three Charged with Conspiracy to Defraud Five People of $3.25 Million in Investment Fraud Scheme
(STL.News) Three men were charged by indictment with conspiring to defraud five victims out of approximately $3.25 million through an investment fraud scheme, U.S. Attorney Philip R. Sellinger announced today.
Malcolm Dean Hampton II, 62, formerly of California and now of Quinlan, Texas, William Joseph Kuzma 60, of Billings, Montana, and Michael Russell Davis 56, formerly of New York and now overseas, are each charged by indictment with one count of conspiracy to commit wire fraud. Hampton and Kuzma appeared today before U.S. Magistrate Judge Ann Marie Donio in Camden federal court and were released on $150,000 bond each. Davis remains at large.
According to documents filed in this case and statements made in court:
During 2017, the conspirators advertised an investment opportunity in Standby Letters of Credit (SBLC), which are essentially a guaranty of payment by a bank or financial institution. The investments were offered through Hampton’s company, 5 Star Investments LLC. Kuzma handled inquiries from potential investors, and forwarded investment contracts via email to potential investors.
The contracts were deliberately vague and confusing, and contained false and fraudulent statements, including promising “guaranteed” returns which were unrealistic and which no investor had achieved, and promising to return the investor’s monies if the SBLC’s were not created. Davis was identified as the “asset manager,” and investors were instructed to wire their investment monies to a bank account in the name of Davis’ company, Jet Exclusive Aviation LLC.
From from March through May 2017, five investors entered into contracts with Hampton, Kuzma and Davis, and wired approximately $3.25 million to Davis’ account. The defendants did not invest the monies as promised, but rather converted them for their own use. Within days of the first victim’s “investment” money going into Davis’ account, Davis began transferring money to his other bank accounts, and also to an account held in Hampton’s relative’s name.
Hampton thereafter transferred some of the proceeds to Kuzma. In response to complaints by the victims, the defendants continued to falsely assure the victims that the investments were moving forward, and later that the victims would get their monies back.
That did not happen. Instead, Hampton, Kuzma and Davis spent the victims’ money on personal expenses, cars, and travel, and also transferred money to other bank accounts controlled by themselves or their family members.
The count of conspiracy to commit wire fraud is punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Michael J. Messenger in Newark, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Diana V. Carrig of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.