Rokita and United States Attorney Announce Indictments in Investment Scheme
Contact: AJ Freeney-Ruiz
South Bend, IN - Today, Indiana Secretary of State Todd Rokita and United States Attorney Joseph Van Bokkelen announced that a Grand Jury sitting in South Bend, Indiana, returned a 20-count indictment charging Thomas and Marietta Squibb with mail fraud, wire fraud, and conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. §§ 371, 1341, and 1343. The indictment charges that, since at least 1995, the Squibbs conspired to solicit investments to develop campgrounds in four Michigan cities - Charlevoix, Lansing, South Haven, and Traverse City - and condominiums in Naples, Florida, and used the mail and interstate wires to advance this scheme. In fact, the Squibbs did not use investors' funds to develop campgrounds in the four Michigan cities or to develop condominiums in Naples.
These charges were filed as a result of an investigation by the Rokita's office working in conjunction with the Federal Bureau of Investigation. This case has been assigned to and will be prosecuted by Assistant United States Attorney Jesse M. Barrett. In April, Rokita's office filed a civil complaint in St. Joseph County Circuit Court to freeze the Squibbs assets for the benefit of allegedly defrauded investors. That action remains pending.
"The Squibbs represent some of worst elements of white collar crime out there," Rokita said. "The cooperation between our office's Prosecution Assistance Unit, the US Attorney's Office and the Federal Bureau of Investigation made it possible to take the first steps in holding the Squibbs accountable for their crimes, as well as protecting the integrity of commerce in Indiana."
The Secretary of State's Prosecution Assistance Unit (PAU) first received a complaint against the Squibbs in January and began investigating. The Prosecution Assistance Unit was created by Rokita and his Securities division in 2004 to further existing investigations and facilitate local law enforcement's prosecution of alleged Securities Act violations. The focus of the PAU is to assist state court prosecutors in an effort to work together at the courthouse and statehouse to root out this white-collar crime. Thus far, the elite white-collar crime unit has helped file charges in 22 of the worst investment fraud cases in Indiana. The Unit has delivered a 15 to 1 Conviction-to-Dismissal record with over 150 years of jail time sentenced to-date.
Thomas Squibb represented to investors that, if money was invested with Squibb Ventures for these projects, he could provide high, guaranteed rates of return over short periods of time. Thomas Squibb also informed investors that, if something happened to him, Marietta Squibb could handle the investments because she was aware of them. Marietta Squibb signed promissory notes, received correspondence from investors, and called investors regarding their investments.
In particular, the Squibbs represented that, on behalf of a millionaire in Michigan, they were developing campgrounds affiliated with Kampgrounds of America ("KOA"). Thomas Squibb said that this millionaire wanted the campgrounds developed for his children. The Squibbs told investors that only a limited number could participate in the development of each campground. To entice investors, Thomas Squibb represented that their investments were loans, and that any earnings were not taxable. He also told investors that their funds would be held in an escrow account and would be returned within thirty days upon request. To memorialize these transactions, the Squibbs provided investors with promissory notes stating that the Squibbs would repay the principal to the investors, and would pay interest at a certain percent per annum, on particular dates. To obtain money from investors, Thomas Squibb would require the investors to wire money to his bank accounts or mail checks to him, or would personally receive the checks from the investors.
Rather than using investors' money for the identified developments, the Squibbs simply withdrew the money from their bank accounts for other purposes or used the funds to pay other investors. When payments to investors were delayed, the Squibbs provided multiple excuses, including that the wife of the millionaire in Michigan had died; that the Squibbs did not have the millionaire's telephone number; that the millionaire was traveling outside the United States; that there were delays in obtaining approval from zoning, health, and environmental authorities; that there were inaccuracies in documents relating to the properties; that previous owners of the properties refused to cooperate in transferring ownership; that a lawsuit relating to one of the properties was postponing its development; and that an underground lake had been discovered beneath one of the properties.
The Squibbs obtained millions of dollars in investments from hundreds of investors over at least a decade. The total amount of principal that was not returned to investors exceeds $3 million, not including promised interest payments. The Squibbs used more than 10 bank accounts to accomplish this scheme.
The specific sentences to be imposed upon conviction will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines. Secretary Rokita and the United States Attorney's Office emphasize that an indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
To combat the problem of Americans losing an estimated $40 billion each year to securities fraud, Secretary Rokita's office has taken unprecedented steps to educate Hoosier investors on how to avoid becoming victims of investment fraud. Rokita reminds Hoosiers there is no such thing as a "completely safe" investment. Investors are encouraged to do their homework and check out investment opportunities by visiting his website, www.IndianaInvestmentWatch.com or by calling 1-800-223-8791. "Remember: If it sounds too good to be true, it probably is," said Rokita.