James Leonard Smith, Wire Fraud, Money Laundering, Virginia 2020

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Virginia Man Sentenced for $5.7 Million Investment Fraud Scheme

A Virginia man has been sentenced to 14 years in prison for his role in an investment fraud scheme that stole approximately $5.7 million from victim investors.

James Leonard Smith, 65, of Midlothian, was convicted by a federal jury of conspiracy to commit wire fraud, wire fraud, and money laundering on October 30, 2020, after a four-day trial.

According to court documents, Smith participated in a worldwide scheme through Chimera Group Ltd., a purported investment company based out of the United Kingdom. The fraud operated as an advance-fee scheme in which the defendants acted as promoters who promised to pay the victims a sum of money at a later date in exchange for an up-front payment.

Smith and his co-conspirators told potential victims that their principal payments would be protected based on letters of credit and other documents that purported to be from a large financial institution. However, these documents were fabricated, sometimes with the assistance of Smith himself.

The evidence also showed that Smith and his co-conspirators used escrow attorneys, who were themselves part of the scheme, in order to give victims the impression that their money would remain secure until the defendants’ promises had been kept.

Co-conspirators Stuart Jay Anderson, 54, of Aliso Viejo, California, and James Michael Johnson, 70, of Richmond, have also been sentenced for their roles in the scheme. Anderson received four years in prison, while Johnson was sentenced to more than eight years in prison.

The U.S. Postal Inspection Service, FBI’s Richmond Field Office, and the Virginia State Corporation Commission investigated the case, while Assistant U.S. Attorney Michael C. Moore and Trial Attorneys Vasanth Sridharan and Christopher Jackson of the Criminal Division’s Fraud Section prosecuted the case.

Senior U.S. District Judge Henry E. Hudson handed down the sentence, with Acting U.S. Attorney Raj Parekh of the Eastern District of Virginia announcing the outcome along with other officials.