United States District Judge Kimberly J.
Mueller sentenced two Sacramento men last Wednesday for an investment
fraud scheme. Judge Mueller sentenced Ronald Wesley Groves, 71, to 10
years in prison and sentenced Donald Charles Mann, 56, to 17 years and
six months in prison.
Today, U.S. District Judge John A. Mendez
sentenced each of them to one more year in prison, to be served
consecutively to last week’s sentence, for retaliating against the
prosecutor and FBI agents, United States Attorney Benjamin B. Wagner
announced.
According to court documents, on May 31, 2007, were indicted on 18
counts of wire fraud in connection with a fraudulent investment scheme.
After their arraignment, they were released from custody on bond. In
February 2008, while awaiting trial, Mann filed four fraudulent liens
with the California Secretary of State in Sacramento: two liens against
all property belonging to the federal prosecutor and one lien each
against the properties belonging to the two FBI agents involved in the
investment fraud investigation. Each lien claimed that $101.9 million
was owed to either Groves or Mann with $100,000 per day in penalties.
In September 2009, Groves and Mann were charged with four counts of
retaliation against federal officials by false claim and slander of
title and one count of obstruction of justice. They were taken into
custody and have remained in custody since then. On December 13, 2011,
both defendants pleaded guilty to two counts of retaliation against
federal officials.
According to the first indictment, Groves was the co-founder and
president of Money Growth Solutions, which operated from April 2005 to
April 2006. Mann was the co-founder and secretary/treasurer. During the
brief existence of Money Growth Solutions, the defendants raised $4.8
million from 642 investors by promising extremely high rates of return
on “international bank trades.” The defendants told investors that these
bank trades were a highly secretive investment vehicle known only to a
few people around the world.
In June 2011, a jury returned guilty verdicts against Groves and Mann
after a nine-day trial. According to evidence presented at their trial,
in one program, investors were offered a 10 to one return (1,000
percent) on their investment within a matter of weeks. In a later
offering, the defendants promised a 40 to one return (4,000 percent) in
the same amount of time. The defendants told investors that while their
money was waiting to be placed into a bank trade, it would be maintained
in an escrow account that could not be touched for any other purpose.
The defendants also told investors that if they were unable to execute a
“bank trade,” the investors would receive their entire investment back,
plus six percent interest within 12 months. With the exception of a few
people who were able to obtain refunds, every MGS investor lost their
entire investment.
The federal investigation revealed that by April 2006, of the $4.8
million received, Money Growth Solutions had less than $65,000 remaining
in its bank account. Some of that money—$300,000 apiece—went into the
pockets of the two defendants. The remainder of the money went to the
defendants’ various pet projects, including $300,000 to the coffers of a
Liberian presidential candidate and $2.5 million to a Florida company
that was supposedly developing a revolutionary battery. The battery
company was later determined by the Securities and Exchange Commission
to be a scam and its owner was federally indicted.
The two cases were the product of investigations by the Federal
Bureau of Investigation. Assistant United States Attorney R. Steven
Lapham prosecuted the cases.
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