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Friday, February 14, 2014

Todd C. Smith and Travis Oliver Charged in $983,000 Investment Fraud Scheme

A Rockford man and a Califomia man were indicted by a federal grand jury in Rockford on fraud charges. Todd C. Smith, 46, of Rockford, was charged with seven counts of mail fraud and 10 counts of wire fraud, and Travis Oliver, 36, of Tremecula, California, was charged with eight counts of mail fraud and 15 counts of wire fraud in connection with a scheme to defraud investors by falsely representing to investors that their investments in Electus Asset Holdings were guaranteed, thereby fraudulently obtaining more than $983,000 from the investors.

According to the indictment, Oliver was sole managmg member of Electus Asset Holdings, and both Oliver and Smith solicited individuals to invest in Electus Asset Holdings, engaging in a scheme from February 13, 2009 to at least March 2012 to defaud investors. The indictment alleges the defendants falsely represented to the investors that their investments would be retmned in one year, yielding a guaranteed rate of interest per month, and that the funds could be withdrawn at any time without penalty. However, it is alleged the defendants knew a large portion of the investors’ funds was used to pay personal and other expenses, such as commissions to the defendants and to make interest and principal payments to other individuals who had invested money with Oliver prior to the fonnation ofElectus Asset Holdings in January 2009 and that the remainder of the investors’ funds was placed in a non-guaranteed investment

It is further alleged that in order to conceal their false promises and misrepresentations and to prevent the investors from demanding the return of their principal, defendants used funds from new investors to pay interest and principal owed to prior investors. The indictment also charges that defendants mailed monthly statements and IRS 1099-INT forms to investors that falsely stated that the investors had earned interest on their investments, when defendants knew no interest had been earned on the investments. The indictment alleges that when investors requested the return of their interest and principal, Oliver and Smith made false statements and promises to conceal the fact the investors’ money had been spent or lost in high risk investments, including that the investors’ checks were going to be issued shortly, that their checks were lost in the mail, and that the investors’ money was invested in company that was under investigation by the Federal Trade Commission and its assets had been frozen.

Each count of mail fraud and wire fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater. If convicted, the court must impose a reasonable sentence under the advisory United States Sentencing Guidelines and under federal sentencing statutes, as well as restitution.

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