Schuette Announces Arrest, Launch of Extradition Process for Saginaw Man Accused of Running $474K Ponzi SchemeContact: Joy Yearout 517-373-8060
January 22, 2014
LANSING - Michigan Attorney General Bill Schuette today announced the arrest of a Saginaw man for his alleged role in an extensive Michigan Ponzi scheme. Joel Wilson, 31, of Saginaw, allegedly defrauded at least three Michigan victims out of hundreds of thousands of dollars and has been on the lam in Europe for more than a year.
As Attorney General investigators closed in on his operation in late 2012, Wilson fled the country for Germany. Schuette filed multiple criminal charges against Wilson in January 2013 and worked with federal officials to issue a warrant for his arrest in Europe. On January 20, 2014, Wilson was arrested by Dresden Police. On January 21, 2014, Schuette's office received notification from INTERPOL that Wilson had been arrested by European law enforcement. Schuette has filed paperwork to begin the extradition process.
"Victims of scam artists deserve to see justice served, and we will fight as long as it takes," said Schuette. "Financial exploitation is a growing crime in Michigan, and we are cracking down on these con artists. Be skeptical of anyone who promises huge returns for a small investment."
"We appreciate the assistance United States Department of Justice INTERPOL Division provided to bring this case closer to securing justice for the victims of this Ponzi scheme."
Beginning in 2009, Wilson allegedly scammed investors through his operation of The Diversified Group Advisory Fund LLC, an investment company. Wilson allegedly told investors that he would use their funds to purchase distressed properties in the Saginaw area and Bay City areas. The properties would later be refurbished and sold for profit, which would go to investors.
When funds Wilson collected from the sales of the unregistered securities failed to turn a profit, he allegedly used new investor funds to pay returns to previous investors - the trademark of a Ponzi scheme. In addition, Wilson allegedly pocketed approximately $47,000 of the investment funds to pay his personal expenses and acquire personal assets.
The following nine charges were filed against Wilson in Bay City District Court on January 8, 2013:
One count of Continuing Criminal Enterprise (Racketeering), a felony punishable by up to twenty years in prison;
Three counts of Sale of Unregistered Securities, a felony punishable by up to ten years in prison;
One count of Larceny by Conversion ($20,000 or more), a felony punishable by up to ten years in prison;
One count of Larceny by Conversion ($1,000-$20,000), a felony punishable by up to five years in prison; and,
Three counts of Fraudulent Sale of Securities, a felony punishable by up to ten years in prison.
Wilson fled the United States for Germany to avoid criminal prosecution. Following Schuette's filing of charges against Wilson, additional victims have come forward with allegations against Wilson and the Diversified Group. Wilson may face additional charges pending the outcome of investigation into those cases.
In September 2013, Schuette announced felony charges against a second person for allegedly perpetrating Wilson's scheme. Shawn Dicken, 40, Bay City, for her alleged role as a salesperson in the Diversified Group Advisory Firm LLC Ponzi scheme.Dicken allegedly failed to disclose the risks associated with the actual investment in question - a highly leveraged real estate investment that could result in the loss of all of the investors' money. Many investors risked their life savings. Dicken allegedly swindled investors out of more than two million dollars by using dishonest tactics. Investigation revealed Dicken allegedly took an eight percent commission, pocketing approximately $160,000 for herself.
Schuette filed the following charges against Shawn Dicken in the 74th District Court in Midland County:
One count of Criminal Enterprises - Conducting, a felony punishable by up to twenty years in prison and/or a $100,000 fine; and,
One count of Embezzlement From A Vulnerable Adult - $50,000 Or More But Less Than $100,000, a felony punishable by up to fifteen years in prison and/or a $15,000 fine or three times the value, the defendant must admit the amount, or it must be greater; and,
One count of Securities - Fraudulent Sales, a felony punishable by up to ten years in prison or a $20,000 fine; and,
Seven counts of False Pretenses - $1,000 Or More But Less Than $20,000, a felony punishable by up to 5 years in prison and/or a $10,000 fine, or 3 times the value of the money or property involved, whichever is greater.
Dicken was arraigned on September 18, 2013 before Judge John Hart in Midland County's 75thDistrict Court. Judge Hart ordered a $1,000,000 cash or surety bond and ordered Dicken to surrender her passport and not to engage as an investment advisor. She scheduled for a jury trial March 3, 2014 before Judge Carras in 42nd Circuit Court.
Citizens who believe they may have been victims of Joel Wilson or The Diversified Group are encouraged to file complaints with the Attorney General's Office.
A criminal charge is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Schuette's Consumer Tips For Safe Investing
Schuette encourages Michigan citizens to exercise caution before investing their money with those who promise exorbitant returns.
"Do your homework before handing over your hard-earned money," said Schuette. "Take your time, ask questions, and be sure to confirm your broker is in good standing with the State before signing on the dotted line."
Key tips to avoid falling victim to a Ponzi scheme or investment fraud include:
- Check out your broker or adviser. Confirm that your broker and financial adviser is registered and in good standing. Contact the Bureau of Commercial Services with the Department of Licensing and Regulatory Affairs, at 517-241-6345, to check out your broker or adviser.
- Beware of strangers touting strange deals. Trusting strangers is a mistake anyone can make when it comes to their personal finances. Almost anyone can sound nice or honest on the telephone. Say "no" to any investment professional who presses you to make an immediate decision, giving you no opportunity to check out the salesperson, firm and the investment opportunity itself. Beware of anyone who suggests investing your money into something you don't understand or who urges that you leave everything in his or her hands.
- Take your time - don't be rushed into investment decisions. Salespersons who use high-pressure tactics to force an investor into an immediate decision are almost always pitching frauds. They don't want you to think too carefully or find out too much because you may figure out that it's a scam.
- Keep tabs on your investments. Be wary when a financial planner says "leave everything to me," or "the plan is too complicated to tell you." Everything should be clear and explainable to you.
- Monitor the activity on your account. Insist on receiving regular statements.
- Ask Questions. Never be embarrassed or apologetic about asking questions for trading activity that looks excessive or unauthorized. It's your money, not your broker's.
- Keep Diligent Records. Keep all of your records relating to your investments, including notes of conversations you have with brokers, salespeople, and financial advisers.
Consumers can find helpful advice and a list of questions to consider in Attorney General Schuette's Consumer Alert for Ponzi Schemes, available on the Schuette's website. Attorney General Schuette also offers specialized consumer advice for Michigan seniors on how to avoid investment fraud through the Senior Brigade website.