OAKLAND – LawFuel – US Legal News – United States Attorney Scott N. Schools announced today that Francis William (“Bill”) Reimers pleaded guilty today to six counts of mail fraud and one count of money laundering arising out of Reimers’s operation of a multimillion dollar fraud scheme which caused losses to hundreds of investors. These guilty pleas are the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division.
In pleading guilty, Mr. Reimers admitted that he established an entity called Advisory Services Group (ASG), purportedly to provide financial and investment management services to individual investors. To persuade individuals to give Mr. Reimers control of the investors’ money, however, Mr. Reimers told these investors a series of false statements. For example, Mr. Reimers falsely stated that he had developed a “regression analysis” program that could predict whether mutual fund values would rise or fall; he falsely promised returns of at least 9%; he falsely stated that he would follow a conservative investment approach; and he falsely stated that he would invest his clients’ money.
Mr. Reimers, however, admitted today that he did not invest these client funds. Instead, he used his clients’ money to pay his mortgage and to buy luxury cars, vacations, and hunting trips. He also used client money to fund two other businesses that Mr. Reimers owned and operated, Plan Compliance Group (PCG) and Univest Capital Management (UCM). PCG and UCM were created to handle third-party administration of 403(b) accounts of school employees (PCG) and third-party administration of benefits for federal government employees (UCM). As third-party administrators, PCG and UCM collected payroll distributions from thousands of employees and remitted them to institutional investment companies and to insurance providers, as directed by the employees. Mr. Reimers used PCG and UCM cash flow to pay off ASG investors who requested monthly dividends or who asked to close their account.
To perpetuate and to conceal his scheme, Mr. Reimers sent purported account statements to his clients. These account statements falsely reflected that his clients’ funds were invested in various mutual funds and tax-free money market funds. But the statements were fictitious; having never invested his clients’ money, their accounts existed only on paper. Even in 2000, when the stock market suffered a significant downturn, Mr. Reimers did not reflect that downturn on the fictitious account statements he sent to clients. This apparent success despite the market setback resulted in more referrals to Mr. Reimers. In the plea agreement, Mr. Reimers admitted to sending fictitious account statements to five clients, falsely representing that these clients had a total of $2.7 million dollars invested with Mr. Reimers, when in fact they had no account at all. Mr. Reimers admitted that his overall fraudulent scheme caused losses of more than $7 million to an aggregate of more than 250 victims.
On March 12, 2007, the United States Attorney’s Office charged Mr. Reimers, 62, formerly of Danville, with six counts of mail fraud, in violation of Title 18, United States Code, Section 1341, and one count of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(A)(i). Under the plea agreement, Mr. Reimers pleaded guilty to all seven counts.
Judge D. Lowell Jensen scheduled the sentencing of Mr. Reimers for August 3, 2007, at 10:00 a.m. in Oakland. The maximum statutory penalty for each count Mr. Reimers pleaded guilty to is 20 years of imprisonment, plus substantial fines and restitution. Any sentence, however, would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal tech Katie Glynn. The prosecution is the result of a 15-month investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division.