Wire Fraud—Investment Scheme

A Scottsdale, Arizona woman and a Texas man have pleaded guilty to wire fraud charges accusing them of bilking at least nine investors out of more than $16 million.^[1] Sharen Stewart and Paul K. Bryan were charged in a 52-count indictment following a four-year investigation by US Immigration and Customs Enforcement and the US Postal Inspection Service.^[2]

The two began their scheme 1999 to promote “High Yield Investment Programs” and “Managed Trade Programs” to investors who were lured with claims of above-average returns coupled with below-market risk.^[3] Ms. Stewart advertised that the program was sponsored by the Federal Reserve and that the investment funds would be secured in a firm licensed by the SEC; $13 million of the funds was deposited into accounts controlled by Ms. Stewart, and $3 million was deposited into accounts controlled by Mr. Bryan.^[4] The two used the funds to purchase expensive homes, artwork, a luxury car, and a boat.^[5]

Wire Fraud
Under 18 U.S.C. § 1343, it is a crime for a person to devise a scheme or artifice to defraud and use telecommunications technology to carry that fraud out.

The punishment for a violation of section 1343 is a fine, imprisonment for up to 20 years, or both. If a financial institution is harmed in the scheme, the fine can be as high as $1,000,000 and the prison sentence can be as long as 30 years.

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[1] Immigration and Customs Enforcement, News Release: Two Plead Guilty in Connection with ICE Probe Targeting a Multi-Million Dollar Fraud Scheme, Nov. 1, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.