A bill of information has been filed against the owner of Budget Finance Company, Donna S. Brown, 65, of Clarington, Ohio with wire fraud, mail fraud and money laundering.
The document charges Brown with one count each of wire fraud, mail fraud and money laundering. Each crime is punishable by a maximum sentence of 20 years in prison, a fine of up to $250,000, three years of supervised release and restitution to the victims of the crimes.
The document alleges that Brown owned and operated Budget Finance company which was both a licensed consumer loan company and an unlicensed investment company. Between 2005 and 2015, she lured potential investors into investing funds with Budget Finance by promising annual returns of between 8 and 12 percent.
Brown mailed checks to investors who requested periodic payments and sent them fraudulent quarterly investment statements reflecting their account balances and interest paid. She also mailed investors IRS 1099 forms, but never sent those forms to the IRS.
“Because no substantial investment source existed to account for well over 800 investment accounts with investments exceeding $31 million, she used money from new investors to pay the existing ones,” U.S. Attorney Glassman said. “This type of scheme is known as a Ponzi scheme.”
Budget Finance closed suddenly in November 2015.
A plea agreement was filed along with the Bill of Information, indicating that Brown will admit to the crimes. The plea agreement says the loss in this case is more than $9.5 million and less than $25 million. The crimes resulted in substantial financial hardship to 25 or more victims.