Ft. Lauderdale, Fla. (Aug. 26, 2004) -- A District Court judge here sentenced a Florida CPA to 37 months in prison and three years of supervised release for his role in an investment fraud scheme that bilked roughly 100 investors of more than $7 million.
In addition to the sentence, U.S. District Court Judge James I. Cohn ordered Thomas Sewell to pay restitution in excess of $7 million to the victims. Sewell earlier pleaded guilty to charges of conspiracy to commit mail fraud and filing false tax returns, according to the U.S. Attorney for the Southern District of Florida.
According to the U.S. attorney, Sewell recruited investors from his accounting practice clientele to participate in a phony investment scheme formed by a man named Myles Farrington. Farrington offered “investment units” at $40,000 each in an offshore corporation he formed called Landmark Investment Trust. Some 100 investors, including the Palm Beach County Police Benevolent Association, a church group, some small businesses, and elderly and retired persons, invested approximately $9.5 million in the fund, according to U.S. Attorney Marcos Daniel Jiménez.
The U.S. attorney said that Landmark provided the investors with fictitious quarterly statements that showed that their investments were doing well, while Farrington was actually using the victims’ investments for his personal benefit and for speculative investments.
The U.S. attorney said that Sewell told clients that their investments would be safe and that he was personally monitoring the funds, but he failed to tell them that that he was getting commissions from Farrington on the investments that he brought in. Sewell also failed to disclose additional income of more than $140,000 from his participation in the scheme on his 1997 and 1998 federal income tax returns, the U.S. attorney said.
According to a report by The Miami Herald, Sewell's attorneys, in a motion filed this month, said that he suffered from ''sexual addiction'' at the time of the crimes and had “an almost insatiable need for cash money to feed this illness,'' spending more than $100,000 in cash on "frequenting topless and bottomless bars, paying for lap dances, consorting with women of the night, call girls and engaging in a series of ‘affairs' while married." The paper said that Farrington is serving a prison sentence.
-- WebCPA staff
