U.S. Department of Justice

United States Attorney
Eastern District of California

Former Financial Advisor Pleads Guilty to Defrauding Investors of at Least $2 Million

FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that Jesse Alvin Cripps Sr., 57, previously of Visalia, pleaded guilty today to 15 counts of mail fraud and two counts of money laundering. Cripps also agreed to the forfeiture of property and proceeds obtained as a result of such violations, including a $2 million personal money judgment.   

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Michele Thielhorn is prosecuting the case.

According to the guilty plea, between July 2001 and June 2008, Cripps, who was working as a financial advisor, devised a scheme to defraud investors through various means. In most instances, Cripps solicited investors by offering them an opportunity to purportedly invest in a real estate investment trust (REIT). He 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 typically earn 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. As a result of Cripps’s false and fraudulent statements, investors gave him money to invest in the purported real estate investment trusts, but instead of investing, Cripps used the money for his own business and personal expenses.

In the guilty plea, Cripps admitted that as part of his scheme to defraud, he periodically sent the investors statements showing the purported progress of their investments and the interest earned to date. Cripps would also use new investors’ money to pay interest amounts owed to other investors. These periodic payments and statements lulled the investors into believing the legitimacy of their investments and brought in new investors. As a result of this investment scheme, Cripps caused a loss of at least $2 million to investors.

Cripps admitted in his guilty plea that once the investors sent him their money, he placed it in his own personal bank account. He would then launder the proceeds through a series of transactions.

Cripps is scheduled for sentencing by United States District Judge Lawrence J. O’Neill on August 12, 2011 at 9:00 a.m. The maximum statutory penalty for each count of mail fraud is 20 years in prison, a $250,000 fine and up to three years supervised release following incarceration. The maximum statutory penalty for each count of money laundering is 10 years in prison, a $250,000 fine and up to three years supervised release following incarceration. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This law enforcement action is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force. 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 StopFraud.gov.

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GENERAL INFORMATION
Financial Fraud Enforcement Task Force

 Leadership
Eric Holder, Attorney General, Chair
 
 Contact
(202) 514-2000
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What is Financial Fraud?
What is Financial Fraud?

Financial Fraud encompasses a wide range of illegal behavior - from mortgage scams to Ponzi schemes, credit card theft to tax fraud. Everyone is affected by financial fraud.