LOS ANGELES – LawFuel.com – US Law News – A previously convicted felon was sentenced late this afternoon to 120 months in federal prison for selling unregistered stock in Internet companies and a fake energy company to victims across the country who lost at least $10 million.
De Elroy Beeler Jr., 56, was sentenced by United States District Judge Dean D. Pregerson. Beeler, who has been in federal custody since 2007 when authorities arrested him to stop an ongoing scheme, previously lived with his family in Carpinteria in Santa Barbara County and had a residence in the Tujunga district of Los Angeles.
Beeler will be back in court in about one month, at which time Judge Pregerson is expected to rule on how much money Beeler should pay in restitution to the hundreds of victims of the scheme.
Beeler pleaded guilty to one count of conspiracy and two counts of mail fraud in late 2008.
In the scheme at the center of the federal prosecution, Beeler worked with former IRS Revenue Agent George Tannous to solicit victims across the country to purchase unregistered stock in the Tujunga-based Bidbay.com, Inc. (a company that was later known as Auctiondiner.com, Inc.) and related companies AskGT.com and Rose Laboratories.
Victim-investors were enticed to put money into the companies with various false claims, including that the companies would conduct initial public offerings, and that Bidbay.com and/or the shell companies would soon be acquired by Ebay, Inc. for $20 per share. Ebay never had any intention of acquiring Bidbay.com and had even sued Bidbay.com for trademark infringement over the use of “bay” in its name. Beeler personally received $4.8 million of investor money as commissions that were not disclosed to investors.
Tannous pleaded guilty to one count of conspiracy and one count of subscribing to a false tax return in 2008. Judge Pregerson sentenced Tannous in March 2012 to 33 months in prison.
A former United States Congressman involved in the scheme was sentenced in December to one year and one day in federal prison in a tax fraud case related to his failure to disclose to the IRS nearly $500,000 of investor funds he received from the Bidbay scheme. Wester Shadric Cooley, 80, a native of Los Angeles who now resides in Bend, Oregon, admitted in court that he received approximately $1.1 million during the scheme and that he failed to report approximately $494,000 on his 2002 tax return.
After Beeler was charged in the Bidbay case in 2007, he was charged in a second case involving the sale of securities in 2006 and 2007 in a fake energy company called First Global One. Beeler falsely told investors that First Global One would have an initial public offering and that it had business relationships with Exxon Mobile Corporation. Beeler received the 10-year sentence today after pleading guilty in both the Bidbay and First Global One schemes.
Beeler was previously convicted in federal court in relation to another fraud scheme that sent him to prison for 36 months, a term he completed in 2005 just before launching the First Global One scheme.
The investigation into Bidbay.com was conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.
CONTACT: Assistant United States Attorney Stephen A. Cazares
Major Frauds Section
Release No. 13-060
Like This Article in PDF?
Just enter your email below and we'll forward to your inbox immediately.