A Lakewood, Colo., man was sentenced this week to three years in federal prison for defrauding more than 23,000 investors through an “offshore rent/mortgage free program,” federal officials said Wednesday.
Kenneth Roy Weare, 58, pled guilty on April 1, 2004, to wire fraud, mail fraud and other charges named in a March 25, 2003, indictment. He was ordered to pay $1.2 million in restitution to the victims who responded to an FBI victim survey.
According to the indictment, Weare devised a scheme to defraud investors by offering them membership to an “offshore rent/mortgage free program” for a yearly membership fee of $375. He promised investors that they would receive payments of $375 a month after an initial six-month waiting period.
Weare established a company called J&K Global Marketing Corp. to implement the scheme, the indictment states.
Weare promised investors they could become a “qualified member” by referring three other investors to become members of the program. Qualified members would receive a $50 payment for each referral, and, after six months, would receive $1,500 per month, the indictment states. Weare also told investors he was investing in “high yield programs,” which would return between 200 percent and 1,200 percent per month.
From Nov. 19, 1999, to Dec. 31, 2000, Weare collected more than $9 million in membership fees by means of wire transfers, checks and money orders to bank accounts in the United States, Canada, Luxembourg, and the West Indies. He then used a portion of the funds to make payments back to investors, and allegedly converted the remainder of the funds for his own use and benefit and the use and benefit of others.
Prior to the indictment, Weare was in the custody of the U.S. Marshals Service on contempt of court charges for failing to pay disgorgement of investors funds, repatriate moneys held offshore, and provide an accounting of money raised from investors, from a civil Securities and Exchange Commission case.
The case was investigated by the U.S. Postal Inspection Service and the FBI, with the assistance of the Securities and Exchange Commission.
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