United States Attorney
Northern District of Ohio
September 24, 2010
Former Police Officer Sentenced to Six Years in Prison For Running Ponzi Scheme That Targeted Police and Firefighters
Raymond Thomas, a former Warrensville Heights police officer, was sentenced to six years in prison for running a Ponzi scheme that defrauded about 25 investors, including several current and former police officers and firefighters, out of approximately $889,000, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced.
“It is particularly galling that firefighters and police who dedicated their career to serving the public had their hard-earned savings taken from them,” Dettelbach said. “This sentence underscores the egregiousness of the defendant’s conduct, and our commitment to rooting out financial fraud in all its forms.”
Thomas, age 49, formerly of Mentor, Ohio, previously plead guilty to one count of mail fraud and one count of filing a false tax return.
From 1997 through July 2006, Thomas represented to approximately 25 investors, many of whom included Cleveland area active and retired police officers and firefighters, that he operated three legitimate companies: Strictly Stocks Investment Company, Inc., JR Ventures, and Adams Title Agency, according to court documents.
Thomas represented to investors that Strictly Stocks would make quarterly payments to investors from income derived from “trading only in stocks and options” and that it would provide investors with “above average fixed returns with below average risk.” Thomas represented to investors that he also operated JR Ventures, a trucking business that included a car and limousine service, and Adams Title Agency, a real estate management company, according to court documents.
Thomas solicited investors for one or more of his companies by representing that the companies engaged in legitimate transactions and produced legitimate income. Moreover, he represented to investors that their money would be placed in the business of their choosing, whether that was Strictly Stocks, JR Ventures or Adams Title Agency, and that their money would not be used for any other purpose, according to court documents.
Thomas did not invest the money as he represented. Instead, Thomas unlawfully commingled investor funds; used investor funds for unauthorized purposes, including to make Ponzi payments to previous investors; and misappropriated investor funds for his own purposes and personal use. Nevertheless, Thomas sent numerous interest checks, quarterly dividend checks, and financial statements to investors, according to court documents.
Thomas also knowingly submitted a false U.S. Individual Tax Return, Form 1040, for the 2006 calendar year in that Thomas understated the amount of his total income for the year by approximately $186,414.00, according to court documents.
This case was prosecuted by Assistant United States Attorney Bridget M. Brennan after an investigation by the Cleveland Office of the Federal Bureau of Investigation and the Cleveland Office of the Internal Revenue Service, Criminal Investigation Division. The Securities and Exchange Commission, Chicago Regional Office, assisted with this investigation.
This prosecution was brought as part of 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.