Two Men Convicted for Multi-Million Dollar Investment Fraud Scheme

Two Men Convicted for Multi-Million Dollar Investment Fraud Scheme

The Department of Justice has announced that a federal jury in Charlotte, North Carolina found two men guilty yesterday for their roles in a five-year multi-million dollar high-yield investment fraud, the Justice Department announced today.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina and Inspector in Charge David McGinnis of the U.S. Postal Inspection Service’s Charlotte Division, made the announcement.

Robert Leslie Stencil, 61, of Charlotte, North Carolina, and Michael Allen Duke, 50, of Richardson, Texas, were each convicted of one count of conspiracy to commit mail and wire fraud, following a three-week trial.  In addition, Stencil was convicted of 13 counts of mail fraud, 13 counts of wire fraud and four counts of money laundering.  Duke was also convicted of three counts of mail fraud, one count of wire fraud and one count of money laundering.  Sentencing before U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina, who presided over the trial, has not yet been scheduled.

“Robert Stencil and Michael Duke shamelessly stole millions of dollars from unwitting investors, including the elderly, to line their own pockets,” said Assistant Attorney General Benczkowski.  “These convictions hopefully provide some consolation to the many innocent victims of this criminal scheme.”

According to the evidence presented at trial, from 2012 through 2016, Stencil, Duke and their co-conspirators sold millions of dollars of worthless stock in a sham company named Niyato Industries Inc. (“Niyato”).  Stencil played the role of Niyato’s Chief Executive Officer.  Duke was Stencil’s top salesperson.  Together with their co-conspirators, Stencil and Duke portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas.  Stencil, Duke and their co-conspirators told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities, and valuable contracts.  Further, they told victims that Niyato would use 97 percent of the money it raised selling stock to grow its business and expand operations.  Stencil, Duke and their co-conspirators used high-pressure tactics when pitching Niyato stock to victims.  Among other things, they sold victims on the opportunity to get in on the ground floor, offering them a portion of a supposedly limited supply of pre-IPO stock at $.50 per share and promising them a 10- to 16-fold return when Niyato went public.  From 2012 to 2016, Stencil, Duke and their co-conspirators repeatedly told victims that an IPO was imminent.

In reality, the evidence showed that Niyato had no patents, facilities, products, or plans to commence an IPO.  Niyato’s true business was the sale of worthless stock.  Stencil, Duke and their co-conspirators used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Duke – half or nearly half of the money they solicited from each investor on behalf of Niyato.  Moreover, Stencil used Niyato’s bank account as his own personal piggybank.  The evidence further established that Stencil, Duke and their co-conspirators sold approximately $2.8 million in stock to around 140 victims, many of whom were elderly.  Duke was Stencil’s top salesperson, selling over $1.4 million of worthless Niyato stock to around 70 victims.  For his role in the fraudulent scheme, Duke received over $700,000.

Four other defendants pleaded guilty and are awaiting sentencing, including Nicholas Fleming, 63, of Northridge, California; Martin Delaine Lewis, 52, of Frisco, Texas; Paula Saccomanno, 61, of Boca Raton, Florida; and Dennis Swerdlen, 64, of Boca Raton, Florida.  Kristian F. Sierp, 47, of Costa Rica, pleaded guilty on Feb. 2, 2017 and received a sentence of 102 months in prison in connection with his role in this case and in an unrelated Costa Rican sweepstakes fraud.  Daniel Thomas Broyles, Sr., 61, of Beverly Hills, California, was also charged and remains a fugitive.  An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the U.S. Postal Inspection Service.  Fraud Section Trial Attorneys William Bowne and Christopher Fenton are prosecuting the case.

Leave your comment