U.S. Swiss Dual National Extradited To United States In Connection With Investment and Bank Fraud Schemes | USAO-DC

            WASHINGTON – Lawrence Paul Schmidt, aka Lawrence Schmid, 60, formerly of the District of Columbia, has been extradited from the United Kingdom to stand trial in the District of Columbia on bank fraud and money laundering charges related to an investment fraud scheme.  The announcement was made by Acting U.S. Attorney Michael R. Sherwin and James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division.

            Schmidt has been detained since his arrest on September 30, 2020 in the United Kingdom.  He made his initial appearance at 2:00 p.m. today in federal court in the District of Columbia, where he was indicted on November 1, 2018.  Schmidt faces two counts of bank fraud, two counts of wire fraud, and six counts of engaging in monetary transactions in property derived from specified unlawful activity. 

            According to the indictment, between in or about 2008, Schmidt created several investment entities, including Commercial Equity Partners, Ltd. (“CEP”) and FutureGen Company (“FutureGen”), through which he solicited investors for real estate, mortgage trust deed notes, tax lien notes, and secured commercial mortgage notes.   Between in or about June 2008 and April 2014, Schmidt raised over $22 million from approximately 200 investors in the United States and elsewhere.  Funds raised from investors were comingled and transferred between and amongst the investment funds to cover whichever expenses were due at the time.  Of the over $22 million raised from investors, less than $11 million was placed into investment products.  Schmidt instead used new investor funds to repay earlier investors, to pay himself approximately $1.4 million in salary, and to pay $1.3 million in personal expenses, including automobile expenses, mortgage and rent payments for multiple residences, and sports ticket purchases.

            As further alleged in the indictment, by January 2014, Schmidt’s investment funds had insufficient funds to pay investors and expenses.  Schmidt deposited fraudulent and forged checks into the bank accounts of his investment funds and transferred those funds to the bank accounts of related investment funds in order to pay investors and expenses.  Schmidt also misled investors concerning their investments.  As the scheme continued to unravel, on April 10, 2014, Schmidt boarded a one-way flight from the United States to London where he remained until his arrest and extradition.

            On June 1, 2014, the U.S. Securities and Exchange Commission (“SEC”) filed suit in U.S. District Court for the District of Columbia, in Civil Action No. 14-cv-1002 (CRC), against Schmidt, CEP, FutureGen, and the entities Schmidt controlled.  The court entered final judgment against Schmidt on October 3, 2018, and entered final judgment against CEP, FutureGen, and the additional entities that Schmidt controlled on March 11, 2019.

            An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.

            This investigation was conducted by the FBI’s Washington Field Office Criminal Division.  The Office of International Affairs in the Justice Department’s Criminal Division, the United States Marshals Service, and the government of the United Kingdom provided substantial assistance in securing Schmidt’s arrest and extradition. 

            The U.S. Securities and Exchange Commission also provided substantial assistance in this investigation.

            The prosecution is being handled by Assistant U.S. Attorney David B. Kent of the U.S. Attorney’s Office for the District of Columbia.

Source link

Author: Editor
The website is owned by STL.News, LLC. However, the website is hosted, designed, and maintained by WebTech Group, a web host, and design agency based in St. Louis, Missouri. USDOJ.Today focuses on aggregating content from the US Attorney's Offices around the country. STL.News uses this content to publish national news at https://STL.News