I really don’t understand why criminals who have failed previous times in the past at committing a crime honestly think they have what it takes to commit it again.
Last month Jon Edward Hankins was sentenced to prison on charges of wire fraud in connection with his scheme to lure investors to invest into his fraudulent hedge fund. Previously, Hankins had been convicted for another fraud scheme.
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This go around Hankins was sentenced to 3 years, 4 months in prison, followed by 3 years of supervised release.
According to United States Attorney Sally Quillian Yates, the charges and other information presented in court: In the winter of 2009/2010, Hankins was serving the home confinement portion of a federal prison sentence he received for a 2007 securities fraud conviction relating to an $8 million fraud scheme involving his Knoxville-based investment company, “Tenet Asset Management.”
Shortly after his home confinement began, Hankins concocted another scheme. He created a website, fake brochures and other business documents, and rented office space and mail forwarding addresses in the names of two entities, “Christian Financial Brotherhood” and “Banker’s Trust Annuity.” He advertised these entities on the internet and elsewhere and solicited investors, investment advisors and stock brokers to invest their funds with him.
From at least December 2009 through February 2010, Hankins represented to a prospective victim that Banker’s Trust managed over $100 million in assets for various clients, that the funds were held at an account at the leading Wall Street firm Goldman Sachs, and that he was making substantial investment returns for existing clients in a hedge fund he called the “Strategic Arbitrage Fund.”
Hankins produced a brochure that claimed that the “Strategic Arbitrage Fund” maintained over $30 million in client funds, and that listed various individuals, including a retired general and the son of a former cabinet secretary, as supposed directors of the fund. None of this was true, as Christian Financial and Banker’s Trust were shams; had nothing close to the assets that Hankins represented; had been “in business” for only a few months; had not been engaged in profitable securities trading; and was not associated with the high profile individuals listed on the brochure.
Hankins, in soliciting investors, deliberately omitted mention of his securities fraud conviction, Tenet Asset Management, or that he was still serving a federal sentence.
The FBI quickly learned of Hankins’ scheme, and conducted a search warrant that shut down the scheme in April 2010. Because this new investment scheme was caught quickly, Hankins obtained less than $600,000 from his victim-investors, of which over $200,000 was recovered and returned to victims.
United States Attorney Yates said of the case, “Before he was even discharged from an earlier federal sentence for investment fraud, he launched another fraudulent scheme. Thankfully, the FBI identified and shut down his new scam very quickly, minimizing the losses that investors suffered” – Source.
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