CEDAR RAPIDS, IA – David Emerson Smith, a resident of Pocatello, Idaho, admitted today in federal court to participating in a brazen attempt to obstruct justice in connection with his brother’s multi-million dollar fraud scheme. Smith pled guilty to one count of conspiracy to obstruct, influence, and impede an official proceeding, facing up to two decades behind bars.
The scheme unfolded between June 2017 and 2018, centering around the impending sentencing of Darrell Smith. While incarcerated at the Bremer County Jail awaiting his fate, Darrell Smith confided in his brother David during a recorded phone call. He revealed that a victim of his fraud could “make it really hard” on him if she continued to cooperate with the government, potentially adding “two extra years” to his sentence. The elder Smith dangled a false promise – stock shares – to potentially silence the woman.
At Darrell Smith’s request, David Smith took action. In February 2018, he contacted the victim, both by phone and through a letter. The letter falsely claimed Darrell Smith had $40,000 earmarked for the victim’s children in investment accounts. It further falsely boasted of $350,000 in nonexistent “tax credits” and a staggering two million shares of an energy company. These claims, investigators later determined, were entirely fabricated, a cynical ploy to buy the victim’s silence.
Federal investigators caught wind of the obstruction attempt before Darrell Smith’s sentencing could occur. In October 2018, the court determined that Darrell Smith had pilfered $2.4 million from his investment clients, including $161,800 from the very victim David Smith attempted to appease. The court didn’t take kindly to the obstruction either, handing Darrell Smith a 175-month federal prison sentence.
David Emerson Smith now awaits his own sentencing, which will be scheduled after the preparation of a presentence report. He remains free on bond. He faces a maximum sentence of 20 years in prison, a $250,000 fine, and three years of supervised release. This case highlights the lengths criminals will go to to evade justice, and the dedication of law enforcement to expose such schemes.
The prosecution is being handled by Assistant United States Attorney Timothy L. Vavricek, with investigative support from the Federal Bureau of Investigation and the United States Postal Inspection Service. Court file information can be found at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 18-CR-2071. Follow the United States Attorney’s Office for the Northern District of Iowa on Twitter: @USAO_NDIA.
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Key Facts
- State: Iowa
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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