Smith Advertising Company Executives Arrested for Fraud

United States Attorney A. Lee Bentley, III announces the filing of a criminal complaint charging Gary Todd Smith (45), a/k/a Todd, and Gary Truman Smith (69), a/k/a Gary, both of Fayetteville, North Carolina, with wire fraud affecting a financial institution. If convicted, each faces a maximum penalty of 30 years in federal prison.

According to the complaint, Gary and Todd Smith ran Smith Advertising. The pair was allegedly involved in a fraud scheme that involved borrowing money (called bridge loans) for Smith Advertising to purportedly pre-purchase advertising space. They also borrowed money on outstanding invoices (called factoring) for Smith Advertising. Each loan, to the extent that it was repaid, was repaid by new loans. The underlying collateral for the loans was, where produced, fake invoices. Smith Advertising maintained a real and a false set of record books. On the date the company ceased operations, the total assets for the corporation were, according to their real books, valued at -$63,723,391.55, and the total equity was -$103,140,084.68.