STUNNING ADMITTANCE: James Ronald Donahoo, II, 36, of St. George, Utah, has entered guilty pleas in a $2.5 million investment fraud case. The scheme targeted unsuspecting individuals and companies through Paradigm Investing, Inc., which Donahoo controlled.
The plea agreement includes a heavy sentence of 48 months in prison followed by three years of supervised release. Donahoo must pay restitution totaling approximately $2,793,501.17 to his victims.
Donahoo misled investors, falsely promising monthly returns of 1 percent to 3 percent on their Paradigm investments. In reality, the company never earned any revenue from its investments. Instead, funds were funneled into businesses owned by Donahoo’s associates and family members.
The plea agreement reveals that Donahoo created fake bank statements to dupe investors, falsely portraying a low-risk investment. He claimed he had a dollar in the bank for every invested dollar, which was a lie.
Donahoo’s Ponzi scheme involved using investor funds for personal gain, including a lavish $267,000 payment to investors and an excessive purchase of fur coats worth over $10,000 with money from his criminal enterprise.
Despite receiving $335,000 in transfers from Paradigm’s account, Donahoo failed to file a tax return for 2008. The case was investigated by IRS-Criminal Investigation and prosecuted by the U.S. Attorney’s Office in Salt Lake City. Sentencing is set for October 7, 2014.
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Key Facts
- State: Utah
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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