LAWFUEL.COM – Legal Newswire –
Henry Jones, 54, a record company executive, formerly of Marina Del Rey
was sentenced to 20 years in federal prison this morning having been found guilty in connection with a Ponzi-scheme. Two other defendants, Arthur Simburg, 64, of Portland, Oregon, formerly of Los Angeles, and Robert Jennings, 59, a pastor from Perris, California, were sentenced in November 2008 to 9 and 12 years in federal prison, respectively.
The three men were convicted of defrauding more than five hundred investors out of more than $32 million through a bogus investment scheme. The court described Jones as “financial predator” who was “a professional confidence artist” and ordered him to pay $28 million in restitution. In addition to taking victims’ money, the court found defendant had destroyed lives. The court noted that many victims lost their homes and defendant’s conduct had torn families apart.
Jones and Jennings were found guilty in July following a three week jury trial. Evidence at trial showed that Jones, Simburg, and Jennings solicited investors for a coal mine venture and an alleged international gold transaction that was highly secretive and allegedly involved the sale of 20,000 tons of gold between Israel and the United Arab Emirates. The solicitation of investments was accomplished largely through nightly call-in telephone conference calls in which investors were promised huge rates of return on the investments, as much as 200 to 300 percent within sixty days. Many of the conference calls also included group prayer, and investors were told that the gold transaction was “divinely inspired” and that it was God’s will for it to come to fruition.
Despite their promises of profitable investments, Jones spent over $21 million of the victim-investors’ money on his own extravagant personal expenses and to fund his Marina Del Rey-based music business. In addition to his music business, which featured his wife and several other women as purported R & B artists, Jones used the victim-investors’ money to purchase a house in Marina Del Rey, a condominium in Culver City, and Ferrari Spider and Porsche Cayenne automobiles. Simburg and Jennings also used victim investor funds to support themselves. The victim-investors ultimately lost more than $28 million to Jones, Simburg and Jennings.
This case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the IRS, Criminal Investigation Division.
CONTACT: Assistant United States Attorney Ruth C. Pinkel
Deputy Chief, General Crimes Section
Assistant United States Attorney Douglas A. Axel
Chief, Major Frauds Section
Release No. 09-44