Man Lied to Investors in Connection with $20 Million of Investments
SAN FRANCISCO – LAWFUEL – The Law News Network – United States Attorney Kevin V. Ryan announced that John A. Hickey was convicted of eight counts of mail fraud and two counts of securities fraud by a federal jury on Friday afternoon, November 18, 2005. The jury, after deliberating for three and a half days, found that the defendant committed fraud in connection with two limited partnerships between 1991 and 1994. The guilty verdict followed a three and a half week jury trial before U.S. District Court Judge William Alsup.
Mr. Hickey, age 49, of San Francisco, was originally indicted by a federal grand jury in 1997 after an investigation by the FBI. Among other things, he was charged with committing mail fraud in violation of 18 U.S.C. § 1341 and securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. § 240.10b-5. Mr. Hickey was charged with his business partner, Mamie Tang. Ms. Tang is currently serving a five year sentence that was imposed following her guilty plea to mail fraud in the same case.
Evidence at trial showed that beginning in 1991, Mr. Hickey raised approximately $20 million from investors through his company, Continental Capital. Mr. Hickey raised the money by offering shares in two limited partnerships. The limited partnerships were created to develop real estate in Napa, Sonoma, and elsewhere. In connection with the limited partnership offerings, Mr. Hickey made false statements regarding his net worth, the properties that would be developed by the partnerships, and the use of the funds raised from the investors. In September 1994, a court-appointed receiver took over Continental Capital and the limited partnerships. The investors lost most of their investment.
The sentencing of Mr. Hickey is scheduled for February 28, 2006, before Judge Alsup in San Francisco. The maximum statutory penalty for each count is five years and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Christopher Steskal and Timothy Crudo are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Miche Sharpe and Nancy Woods. The prosecution is the result of an investigation by the Federal Bureau of Investigation.