A Sweetwater man who perpetrated a $12.3 million fraud while on pretrial release in a separate fraud case had almost nine years tacked onto his sentence today, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Stewart Kile Williams, 31, pleaded guilty in March to two counts of wire fraud and two counts of engaging in monetary transactions in property derived from unlawful activity (money laundering). He was sentenced Thursday by U.S. District Judge James Wesley Hendrix to 105 months in federal prison, to be served consecutive to his existing 70 month sentence, and ordered to pay roughly $7.4 million in restitution.
According to court documents, Mr. Williams committed these crimes in late 2018 and early 2019, while on pretrial release for crimes committed in the Southern District of Texas. (He was first charged by the Southern District in summer 2018 for selling non-existent cattle to a ranch in Decatur for $2.5 million. Following an indictment, he was released on bond, but would go on to have that release revoked in late 2019 after a local arrest for theft of hay bales. He eventually pleaded guilty in to four counts of wire fraud and was sentenced to 70 months in federal prison and ordered to pay more than $2 million in restitution.)
“They say insanity is doing the same thing over and over and expecting different results. Mr. Williams wasn’t insane, but he was brazen. While on pretrial release for one fraud in south Texas, he had the audacity to perpetrate a similar fraud in north Texas. If he thought federal prosecutors would content themselves with holding him accountable in only one case, he was sorely mistaken. We will not tolerate repeated maleficence,” said Acting U.S. Attorney Prerak Shah.
“Mr. Williams’ bold actions in committing additional crimes while on pretrial release for other crimes shows his complete lack of concern for our laws or his fellow citizens and this additional sentencing is deserved,” said IRS – Criminal Investigations Special Agent in Charge Christopher J. Altemus Jr., Dallas Field Office.
In plea papers, Mr. Williams admitted that while on pretrial release, he formed AZS Trenching, an unregistered sole proprietorship that provided freight transport and trenching services in the Permian Basin. In January 2019, he entered into an agreement with Navarone Capital, a privately held factoring company that purchased outstanding invoices from businesses like AZS.
At first, everything was above-board – Mr. Williams sent Navarone invoices for work AZS performed for pipeline company M.G. Dyess, Navarone wired advance payment to his bank account, and when M.G. Dyess paid Mr. Williams, he mailed the checks to Navarone.
Two months later, however, Mr. Williams asked Navarone to factor invoices provided for work he said AZS purportedly performed for pipeline company HIS. In fact, AZS had never serviced HIS.
In order to convince Navarone that the bogus HIS invoices were legitimate, Mr. Williams assumed the identity of an HIS construction manager. He obtained a temporary cell phone with an area code that matched HIS’s, and then, posing as the HIS employee, called Navarone to assure them that AZS was indeed performing the work outlined on the invoices. He also created a fake email address through godaddy.com, purportedly belonging to the HIS employee, from which he approved the bogus invoices complemented AZS’s “work.”
Of course, when the bogus invoices came due, Mr. Williams could not pay Navarone. After months of excuses and non-payment on HIS invoices, Navarone contacted HIS headquarters. The pipeline company told Navarone they did not have, and never had, a business relationship with AZS or Mr. Williams.
In total, Mr. Williams presented 38 bogus invokes to Navarone, causing them to wire approximately $12.3 million into his bank account. He used the criminally derived proceeds to make a number of large purchases, including a home in Abilene and $500,000 in construction equipment.
Internal Revenue Service – Criminal Investigations, the United States Postal Inspection Service, and the Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorney Ann Howey of the Northern District of Texas prosecuted the north Texas case with significant assistance from Assistant U.S. Attorneys William Hagen and Jason Corley of the Southern District of Texas.