Timothy G. Fisher, Money Laundering, California 2024

Timothy G. Fisher, 39, of Pasadena, Calif., the president of a Florida-based financial firm, has pleaded guilty to money laundering in a brazen $179 million fraud scheme that gutted a Milwaukee investment company and its clients. Fisher, who operated as chief operating officer of First Farmers Financial LLC, admitted to orchestrating the sale of 26 non-existent loans to the firm, which relied on falsified documents to appear legitimate.

The fake loans, ranging from $2.5 million to $10 million, were falsely represented as federally backed instruments issued to borrowers in Florida and Georgia. In reality, no loans were ever made. The Milwaukee firm, acting on behalf of community banks, retirement plans, municipalities, and subdivisions across Illinois and beyond, lost the full $179 million it paid for the fraudulent assets.

Fisher pleaded guilty on Thursday to one count of money laundering, a charge that carries a maximum penalty of ten years in federal prison and a $900,000 fine. U.S. District Judge Charles P. Kocoras scheduled sentencing for May 4, 2017, at 9:45 a.m. in Chicago. The plea comes as part of a broader federal crackdown on financial fraud targeting public and institutional investors.

According to the plea agreement, Fisher fabricated financial statements to deceive the Milwaukee firm and then funneled a portion of the fraud proceeds through illicit transactions. He directed a $450,000 wire transfer from First Farmers’ Florida account to his personal bank account in California, then moved the funds to a Nevada business account as part of a sham investment. The transactions were designed to conceal the source of the stolen money.

Fisher’s co-defendant, Nikesh A. Patel, the CEO of First Farmers Financial LLC, has pleaded not guilty to five counts of wire fraud. Patel, of Windermere, Fla., is accused of submitting false statements to the U.S. Department of Agriculture to obtain federal loan guarantees under a rural development program. Prosecutors allege the company gained USDA certification through lies about its assets and leadership.

The case was announced by Zachary T. Fardon, U.S. Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the FBI’s Chicago office; and Jeffrey A. Monhart, Regional Director of the Labor Department’s Employee Benefits Security Administration. Assistant U.S. Attorneys Patrick King and Rick Young are prosecuting the case, which continues to unfold ahead of Patel’s next court appearance on December 6, 2016.