HOUSTON – The 75-year-old long time fugitive known as
“Butch” Ballow has received a second federal sentence following his admission
of defrauding investors in a Nevada company with shares traded on the
over-the-counter securities market, announced U.S. Attorney Ryan K. Patrick.
Harris Dempsey aka “Butch” Ballow, formerly of formerly of Galveston County,
pleaded guilty Feb. 2, 2018, to wire fraud and conspiracy to commit wire fraud.
Today, U.S. District Judge Ewing Werlein Jr. sentenced
Ballow to serve 40 years in prison – the statutory maximum. He was further
ordered to pay $37,544,944 in restitution. At the hearing, the court heard from
one victim whom Ballow defrauded out of $5 million. The victim explained that
Ballow used religious pretenses to convince victims to invest money and that he
presented himself in Mexico as a type of missionary. He further mentioned that
he knew victims who had lost their life saving to Ballow.
Judge Werlein added that in all his decades on the bench, he
could not think of a more outrageous fraudulent crime spree, calling it
“despicable” and noting there were more than 500 victims.
Assistant U.S. Attorney (AUSA) John Lewis told the judge
Ballow was a “financial predator” who would keep committing fraud as long as he
was out of jail and explained Ballow had been using fake names to commit fraud
since at least the early 1980s when he was convicted of a financial crime
against a jewelry store in San Diego.
In this case, Ballow admitted to defrauding investors in
E-SOL International Corporation.
At the time of the offense, Ballow was a fugitive from
justice in the United States. He had previously been convicted of money
laundering that centered on misrepresentations made in connection with the
purchase and sale of stock. Ballow pleaded guilty in that case before U.S.
District Judge David Hittner and was released on bond. He was set for
sentencing Dec. 16, 2004, but failed to show, having fled the country for Mexico
where he lived for almost five years under a series of fake names. While there,
he defrauded numerous investors through a new scheme which is the basis for the
sentencing today.
At the time of his plea, Ballow admitted that in 2005, while
living as a fugitive in Mexico under the name John Gel, he purchased the
majority of the publically traded shares of E-SOL and installed fictitious
persons named Robert Remington and Marilyn Desimone as officers. At the time,
E-SOL had almost no assets and conducted no business. Nonetheless, over the
course of the next four years, Ballow sold E-SOL stock to investors in return
for millions of dollars by deceiving them about the company’s assets and
finances, while hiding his identity, his criminal convictions and his status as
a fugitive.
In June 2008, Ballow pretended to be a banker named Tom
Brown and convinced an American investor living in Puerto Aventuras, Mexico, to
purchase E-SOL stock for $5 million. Ballow convinced the investor that E-SOL
was developing a golf and recreational resort community in the jungle west of
Cancun. However, the resort was fictitious and the stock was worthless. Ballow
soon fled from Puerto Aventuras and surfaced under a new name a few months
later in Puerto Vallarta, Mexico, where he continued to defraud investors.
Ballow was ultimately arrested by Mexican authorities July
13, 2010, in Nuevo Vallarta, Mexico, and extradited to the United States the
following year.
Once in the United States, Judge Hittner ordered him to
prison for 10 years in prison and to pay $10 million in restitution for the
2003 money laundering conviction.
Several other persons have been convicted of conspiring to
commit wire fraud with Ballow while he was in Mexico and ordered to federal
prison including Austin lawyer Patrick Lanier, 69, and Christopher Harless, 65,
of Georgetown, who are currently serving a 17 and 20 years in federal prison,
respectively. Other co-conspirators are awaiting sentencing or remain fugitives
in the case.
The FBI and IRS - Criminal Investigation conducted the
investigation with the assistance of the U.S. Marshals Service and U.S. Postal
Inspection Service. The United States government also received extensive and valuable
assistance from the governments of Mexico and Canada.
Assistant U.S. Attorneys John R. Lewis and Belinda Beek are
prosecuting the case.
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