oversight

Former New Hampshire Financial Consultant Pleads Guilty To Fraud, Money Laundering And Tax Evasion. Concord, NH., October 28, 2014

Published by the Department of Education, Office of Inspector General on 2014-10-28.

Below is a raw (and likely hideous) rendition of the original report.

OIG Investigative Reports Press Release Concord NH., October 28, 2014 - Former New Hampshire Financial Consultant Pleads Guilty To Fraud, Money Laundering And Tax Evasion
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THE UNITED STATES ATTORNEY'S OFFICE
DISTRICT OF NEW HAMPSHIRE
NEWS
Former New Hampshire Financial Consultant Pleads Guilty To Fraud, Money Laundering And Tax Evasion
October 28, 2014
CONCORD, NEW HAMPSHIRE – Frederick V. McMenimen, III, 53, of Bow, pleaded guilty in United States District Court for the District of New Hampshire to one count of mail fraud, one count of money laundering and three counts of federal income tax evasion, announced United States Attorney John P. Kacavas.
McMenimen admitted that from approximately September 2008, to about October 2011, he fraudulently solicited more than $1 million in purported investments from some of his financial advisory clients.  Each of the clients was an elderly widow whose family had long-standing personal relationships with McMenimen’s family.
McMenimen advised each client to liquidate existing annuities or other investments, to deposit the proceeds in their checking accounts and to then write checks payable to APSB.@   In most instances, McMenimen caused the clients to write those checks by falsely leading them to believe that PSB was another investment vehicle that was better for them than their existing annuities.  In actuality, PSB was a shorthand reference to a defunct retail sporting goods business, PSB Sports LLC that McMenimen had once owned and operated.  Between approximately September 8, 2008, and October 2011, McMenimen fraudulently induced the clients to write twenty-three checks payable to PSB in the aggregate estimated amount of approximately $1.3 million.
McMenimen deposited the checks into a bank account he maintained in the name of PSB.  He then used those funds to purchase official bank checks which he directly or indirectly deposited into a checking account maintained in a relative’s name at an FDIC insured financial institution.  The relative in whose name the account was maintained provided McMenimen with several books of pre-signed but otherwise blank checks, thereby affording McMenimen complete access to the fraudulently obtained funds.
Despite expending all of the proceeds on personal expenses, McMenimen did not record any of the fraudulently obtained funds as income on the tax returns he filed for tax years 2008, 2009 and 2010.  Because McMenimen underreported his income for those tax years, his tax returns reflected a tax due and owing that was substantially less than his true tax liability. McMenimen is scheduled to be sentenced on February 11, 2015.
This case was investigated by the Bedford (N.H.) field of the Federal Bureau of Investigation, the Portsmouth (N.H.) field office of the IRS’s Criminal Investigation division and the Department of Education.  The case is being prosecuted by Assistant United States Attorney Bill Morse.
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Last Modified: 12/17/2014
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