The former Bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter Day Saints has pleaded guilty today to federal wire fraud and money laundering offenses stemming from an investor fraud scheme, said U.S. Attorney David B. Fein of the District of Connecticut.
Julius Blackwelder, formerly of Stratford, entered the pleas in New Haven Federal Court before U.S. Senior District Judge Ellen Bree Burns. He faces a maximum of 30 years in prison at his sentencing on May 15.
Blackwelder's ward is housed in the Church of Jesus Christ of Latter Day Saints in Trumbull. The Bridgeport Ward is separate from the Trumbull Ward.
"This defendant abused his position of trust as a leader in his church to defraud fellow church members and others out of hundreds of thousands of dollars, much of which he used to construct a waterfront home," Fein said. "I commend the U.S. Postal Inspection Service, SIGTARP, IRS-Criminal Investigation, Connecticut Department of Banking and our other law enforcement partners who are working diligently to protect investors by identifying and rooting out fraudulent financial schemes."
"According to court documents and statements made in court, beginning in 2005, Blackwelder persuaded individuals to invest their money with him as part of an investment pool known as the "Friend's Investment Group." At the time, Blackwelder was the Bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints located in Trumbull, and he solicited investments from, among others, members of his congregation.
"He misrepresented to investors that he would invest their money in safe, long-term commodities futures contracts, and that he was an experienced and successful commodities investor. In some instances, he guaranteed investors' principal and a specific return on their investment. He documented his misrepresentations to investors in promissory notes, offering memoranda, and account updates that he prepared.
"In fact he used investors' money to pay his own expenses, which included repaying earlier investors in the scheme, building a waterfront home in Stratford, and repaying personal bank loans, including a line of credit from a Troubled Asset Relief Program (TARP) recipient bank.
Through this scheme, BLACKWELDER defrauded investors of more than $400,000, Fein said.
This matter is being investigated by the United States Postal Inspection Service, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Internal Revenue Service – Criminal Investigation, and the State of Connecticut Department of Banking. The case is being prosecuted by Assistant United States Attorney Jonathan N. Francis and Deputy United States Attorney Deirdre M. Daly.
The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice's Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State's Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.