A North Canton man has been charged with conspiracy to commit wire fraud and bankruptcy fraud, according to a two-count criminal information filed by the U.S. Attorney’s Office for the Northern District of Ohio.
James W. Wallace, 47, was charged with conspiracy to commit wire fraud and bankruptcy fraud, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
The information alleges that Wallace, and Joseph Beck of Allentown, Pennsylvania, acting together and with others, from approximately January 2009 through December 2012, engaged in a scheme to defraud at least fifteen small business owners of at least $1,500,000 through an investment and loan scam.
Wallace and Beck, acting through their companies Wallace Financial and Washington Integrity, fraudulently induced individuals to purchase ‘aged shelf corporations,’ which served no legitimate business purpose other than to funnel money back to Wallace and Beck for their personal use.
‘Aged shelf corporations’ were corporations that had been created some years before, but had never engaged in any business and were corporations on paper only. Wallace and Beck allegedly induced the would-be borrowers to believe that with the purchase of these previously created but dormant corporations they would qualify for private loans, credit cards with high credit limits, and other credit opportunities in amounts greater than were otherwise available to them from financial institutions.
The information further alleges that Wallace and Beck fraudulently misrepresented that the money that customers paid to Wallace Financial and Washington Integrity for aged shelf corporations was used to obtain trade references, gain high PAYDEX scores (credit scores for corporations), and effect private placement of the loans. Wallace and Beck falsely told customers that their profit in the transaction would come later, after loans had been funded, from a percentage of the loans they succeeded in acquiring.
Meanwhile, Wallace and Beck allegedly used a substantial share of the money to pay for personal expenses including strip clubs, jewelry, tattoo salons, meals at restaurants and bars, vacations and resort hotels, testosterone supplements, luxury products, sports equipment, tanning salons, payments on personal loans and mortgages, cash withdrawals, and transfers to personal accounts.
The information also alleges that, after agents with the FBI executed a search warrant on Beck’s residence and offices in Pennsylvania, and after former Wallace Financial and Washington Integrity customers filed civil lawsuits against Wallace, that he filed a false bankruptcy petition, under penalty of perjury, in the Northern District of Ohio.
Wallace’s false bankruptcy petition, titled ‘In re: James Wallace,’ Case No. 12-61185, allegedly withheld information regarding his involvement with Beck and Washington Integrity, the number and amounts of creditors and debts owed by Wallace and his companies, bank accounts he possessed, and his interests in executory contracts.
Wallace, who resides in North Canton, Ohio, will appear before a U.S. Magistrate Judge for arraignment on the charges.
Defendant/Respondent: James W. Wallace
Exact Criminal Charges: Conspiracy to Commit Wire Fraud and Bankruptcy Fraud
City and State: North Canton, Ohio
Exact Date: January 2009 – December 2012
Sentence or Outcome: Currently pending
Dollar Amounts: $1,500,000
Related Federal Cases
- Jamarea Grant, Wire Fraud and Conspiracy, Ohio 2015 · District of Columbia
- Lashell Patton, Wire Fraud Conspiracy, Tennessee 2023 · Washington
- Hubbard Bell, Wire Fraud Conspiracy, Texas 2024 · Washington
- Debra Parris, Conspiracy to Violate Foreign Corrupt Practices Act and Commit Visa Fraud, Texas 2022 · Washington
- Robert Nathaniel Andre Thomas III, Mail and Wire Fraud, Ohio 2020 · Washington
Key Facts
- State: Ohio
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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