Former Wakefield Man Impersonating Heir to Sioux Indian Trust Pleads Guilty toDefrauding Three Individuals and Charles Schwab & Co. Out of More Than220,000, Reports U.S. Attorney
BOSTON, Nov. 15 /PRNewswire/ -- A former resident of Wakefield, Massachusetts pled guilty today in federal court to mail fraud, wire fraud, and uttering and possessing counterfeited securities in connection with a scheme in which he defrauded three individuals by holding himself out as the heir to a Sioux Indian trust worth several hundred million dollars.
United States Attorney Donald K. Stern and Charles S. Prouty, Special Agent in Charge of the New England Filed Division of the Federal Bureau of Investigation, announced that KENNETH D. HACKER, age 34, pled guilty before U.S. District Court Judge Richard G. Stearns to three counts of mail fraud, 8 counts of wire fraud and 3 counts of uttering and possessing counterfeited securities.
Assistant U.S. Attorney Diane Freniere stated at today's plea hearing that if the case had gone to trial the government would have proven that HACKER devised and executed a scheme in which he defrauded an investment advisor, a travel agent, and a psychotherapist out of more than $200,000 by holding himself out as a tremendously wealthy young man - the benefactor and heir to an Indian trust holding assets of several hundred million dollars. HACKER told his victims that his great, great, great grandfather, a Sioux Indian chief, discovered gold on the reservation in the 1860s and put that gold in a Swiss bank. The gold, valued at $1 million in the 1860s, was now worth several hundred million dollars. HACKER told his victims that one family member from each generation was selected to control the trust and that in the fall of 1997 he was selected to control the trust.
In order to corroborate his story and carry out his scheme, HACKER created and gave to his victims various fabricated financial documents, purporting to evidence his great wealth. These included a fabricated financial statement and counterfeited checks. HACKER even took one victim, the investment advisor, to one of Boston's premier law firms to meet with an estate planner to review his financial matters. HACKER lived an extravagant lifestyle, shopping at exclusive shops in New York and Boston, taking residence at exclusive hotels, and traveling routinely by limousine.
Although HACKER had tremendous wealth, he explained to each victim that he did not presently have ready access to his money as it was overseas. He further assured his victims that he was working with the overseas trust administrator and that substantial amounts of money would be sent to the United States for his use shortly.
Based on his numerous misrepresentations, the three individual victims allowed HACKER to use their credit cards and/or got second cards off of their own accounts for HACKER to use. HACKER fraudulently induced his victims to pay for his lavish stays at some of the nicest hotels in New York City, including several stays at The Plaza Hotel. He also made numerous charges for clothing at Prada, Gucci, and Armani, as well as computer equipment which he used to further his scheme. In addition to these "authorized" charges, HACKER used certain credit cards belonging to his victims without their knowledge or consent. As the scheme progressed, HACKER promised to endow certain foundations that were of interest to his victims in order to assure their willingness to continue to give him money. In order to legitimize this promise, HACKER prepared and gave to his victims counterfeit checks made out to their respective foundation for several million dollars.
With regard to the fraud on Charles Schwab & Co., in November, 1998, HACKER deposited 5 checks with a total face value of $408,000 to his trading account. Immediately thereafter, he directed numerous purchases of stock and treasury bonds. By the time Charles Schwab & Co. determined that the checks HACKER deposited were drawn on accounts with non-sufficient funds, it had lost more than $20,000 in equity in the account.
When asked at today's hearing by Judge Stearns how he pulled off such a scheme, the defendant simply replied "Greed."
Judge Stearns scheduled sentencing for February 12, 2001. The maximum penalty for each count of mail fraud and wire fraud is 10 years' imprisonment and a $250,000 fine, and for each count of uttering/possessing counterfeited securities is 10 years' imprisonment and a $250,000 fine.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Diane Cabo Freniere of Stern's Economic Crimes Unit.
SOURCE U.S. Attorney
CO: U.S. Attorney
ST: Massachusetts
IN:
SU: LAW
11/15/2000 16:40 EST prnewswire.com |
