A California man who falsely told investors that he was a
billionaire who could access certain financing, including hundreds of millions
in cash in an overseas bank account, in exchange for up-front fees was
sentenced today in federal court in Denver, Colorado to 70 months in prison.
Assistant Attorney General Brian A. Benczkowski of the
Justice Department’s Criminal Division, Inspector in Charge Craig Goldberg of
the U.S. Postal Inspection Service’s Chicago Division and Acting Inspector in
Charge Kevin Rho of the U.S. Postal Inspection Service’s Denver Division made
the announcement.
Kenneth Brewington, 55, of Corona, California, was sentenced
by U.S. District Judge Philip A. Brimmer of the District of Colorado, who also
ordered Brewington to serve three years of supervised release and to pay
restitution in the amount of $563,526.78.
Brewington was convicted on May 18, following a two-week
jury trial, of one count of conspiracy to commit mail and wire fraud, one count
of mail fraud, five counts of wire fraud, one count of conspiracy to commit
money laundering, one count of laundering monetary instruments, and two counts
of engaging in monetary transactions in property derived from specified
unlawful activity.
According to evidence presented at trial, beginning in
approximately 2009, Brewington told victims that he required millions of
dollars in supposed fees in order to access his purported extraordinary wealth
abroad, which in turn could be used for financing. During the scheme, Brewington and his
coconspirators sold promissory notes to victims, including through a
financial-services marketing company based in Denver called Compass Financial
Solutions (CFS). Brewington and his
coconspirators falsely represented to their victims that their money would be
used to pay for, among other things, bank transaction fees and tax penalties to
the IRS. To conceal the nature of their
scheme, Brewington and his coconspirators told victims to wire their funds into
an attorney-trust account. The funds
from that account, however, were then sent to Brewington and his coconspirators
and spent on, among other things, repayments to other investors and personal
expenses. Brewington was not, in fact,
wealthy and was instead struggling to pay his personal debts, the evidence
showed.
The evidence presented at trial showed that Brewington’s
victims lost over $3 million to his fraud scheme.
The former CEO of CFS, Brian G. Elrod, 59, of Lakewood,
Colorado, and the company’s former corporate counsel, William E. Dawn, 80, of
Denver, Colorado, previously pleaded guilty for their roles in the scheme. Elrod was sentenced to serve 41 months in
prison, followed by three years of supervised release, and ordered to pay
restitution in the amount of $2,440,051.29.
Dawn was sentenced to time served and ordered to pay restitution in the
amount of $366,752.01.
The investigation was led by the U.S. Postal Inspection
Service. Trial Attorneys Anna G.
Kaminska, Kyle C. Hankey and Jennifer G. Ballantyne and Assistant Chief Henry
P. Van Dyck of the Criminal Division’s Fraud Section prosecuted the case. The U.S. Attorney’s Office for the District
of Colorado and the Securities and Exchange Commission also provided
substantial assistance in this matter.
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