Whole Bakers owner, Patricia “Patty” Stewart, was sentenced yesterday to the statutory maximum of 60 months in federal prison for running an investment fraud scheme. The scheme defrauded investors, including elderly Texas citizens, of more than $2 million.
According to documents filed in the case, from December 2005 through May 2010, Stewart, who owned and managed Whole Bakers, LLC and Stewart International Consultants, Ltd., offered and sold investments in stock of Whole Bakers, LLC. The investments were investment contracts because investors provided money to fund a common enterprise, and in return, they expected to receive a return generated by Stewart’s entrepreneurial efforts.
Stewart misled, deceived and defrauded prospective investors by misrepresenting and failing to disclose material facts. For example, Stewart prepared written materials that were sent to investors which stated investor funds would be used to fund Whole Bakers to further the creation and production of gluten and wheat-free bakery items; that she would operate Whole Bakers as a gluten and wheat-free baker and would develop and produce natural/organic food and gluten/wheat-free food; and that all funds raised would be used in implementing Whole Barkers’ marketing and acquisition strategy.
However, Stewart, who represented herself as a licensed securities dealer, even though she was no longer registered as such, failed to advise investors that their funds would be comingled with other funds, that investor funds had been, and would be, diverted for unrelated purposes, and that she and others would use the funds for their own personal benefit.
Stewart was ordered to surrender to the Bureau of Prisons by March 28, 2012 and to pay $2,027,796 in restitution to the victims of her crime – Source.
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