Alton John Smith Sentenced to Federal Prison for Bank Fraud

July 1, 2010 - DENVER—Alton John Smith was sentenced Monday to serve 60 months (five years) in federal prison, followed by five years of supervised release, for bank fraud, United States Attorney David Gaouette and FBI Special Agent in Charge James Davis announced. The sentence, handed down by Chief U.S. District Court Judge Wiley Y. Daniel, includes an order of restitution totaling $767,709.07 payable to Wells Fargo, Security Service Credit Union, and an insurance company. Smith, who is free on bond but subject to electronic monitoring, was ordered to report to a facility designated by the Bureau of Prisons on or before August 2, 2010.

Alton John Smith was first charged by Information on April 7, 2009. Smith was later charged by Indictment on September 17, 2009. Following a three-day jury trial, Smith was convicted on February 10, 2010, on each of the four counts of bank fraud contained in the indictment. He was sentenced by Chief Judge Daniel on June 28, 2010.

According to the facts presented to the jury during trial, in mid-September 2007, Smith filed documents associating himself with Marrick Entertainment, a shell company he used to support false representations about his income made during his scheme to defraud Wells Fargo Bank and Security Service Federal Credit Union. Trial testimony demonstrated that Marrick conducted no legitimate business. In November of 2007, Smith started opening bank accounts using a fraudulent persona, Austin Ikeme. The Ikeme identity was listed as a signatory to these accounts, as well as other accounts Smith controlled.

On November 14, 2007, Smith, using the Ikeme identity, signed a contract to purchase a property in Parker, Colorado. In connection with the purchase of that property, Smith applied for a $982,000 mortgage loan from Wells Fargo, as well as a $100,000 home equity line of credit, also from Wells Fargo. In mid-December 2007, Smith attempted to close on this home loan, but the title company refused to complete the transaction because of concerns Smith was using a fake Colorado drivers license. Later in December 2007, the defendant successfully closed on both loans. To obtain the loans, Smith made false statements on the applications, including: 1) using his fake identity; 2) using a false social security number; 3) using a false date of birth; 4) falsely stating he was employed by Marrick for seven years; 5) falsely stating his monthly income was $21,973; 6) falsely stating he had a checking account balance of $265,311; 7) falsely stating that no part of the down payment was borrowed. He also used a fake California drivers license, false payroll documents, and false bank statements.

That same month, Smith used the same fraudulent documents to open a checking account at TCF Bank in Parker. Smith was then arrested for forgery by local law enforcement. Eventually, after the loan closed, Smith received $87,720 in loan proceeds, which he used to pay personal expenses and to buy a fake cashier’s check used in the attempt to open the TCF Bank account. In April 2008, Smith opened new checking and savings accounts at Wells Fargo, using both his real identity and the Ikeme identity as signatories. Within a month of opening these accounts, Smith transferred the entire balance to a Marrick bank account at Wells Fargo. He then spent that money on personal expenses and a trip to Las Vegas.

Earlier in 2008, Smith used his fake identity to lease three vehicles from Centennial Auto Sales. After learning he wasn’t allowed to obtain any more leases, Smith submitted a fraudulent loan application using the Ikeme identity to secure a $42,834 loan from Security Service Federal Credit Union to buy a 2008 Chrysler Aspen.

“Financial fraud is a priority of the Justice Department and a priority of the U.S. Attorney’s Office in Colorado,” said U.S. Attorney David Gaouette. “Thanks to the hard work of the FBI and U.S. Attorney’s Office, another fraudster will serve time in federal prison.”

“Theft and fraud committed by one, affects many,” said FBI Special Agent in Charge James Davis. “We will continue to work closely with our law enforcement partners and all of the bank industry professionals to week out those who commit this type of financial crimes that ultimately costs each and every one of us.”

This case was investigated by the Federal Bureau of Investigation (FBI).

Smith was prosecuted by Assistant U.S. Attorney Matthew Kirsch.

Today’s sentencing is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.