Tuesday, April 10, 2007

Maryland Accountant Pleads Guilty to Real Estate Investment Fraud

John R. Ring, Jr., 25, Bluffton, South Carolina, formerly of Ellicott City, Maryland, pled guilty to wire fraud in connection with a scheme to defraud investors and partners at his employer’s accounting firm.

According to the guilty plea, Ring was employed as an accountant at Fisher-Ring, LLC, an accounting firm headquartered in Columbia, Maryland. One of the two partners of the firm is Ring’s uncle. From November 2005 to July 2006 Ring defrauded several clients of Fisher-Ring, acquaintances through his church, and others, as well as the firm and its partners, of approximately $450,000.

Ring falsely represented to investors that they could invest in Old Bay Investments, LLC, a company formed by Fisher-Ring’s partners to purchase real estate in South Carolina, despite knowing that the firm’s partners were not opening Old Bay Investments to other investors.

Ring collected approximately $408,000 in investor funds by instructing an investor to wire transfer funds to a bank account Ring managed for Fisher-Ring, and obtaining investment checks from investors. Ring altered several of the checks in order to deposit them into the bank account he managed.

Ring falsely represented that these investor funds had been used to purchase real estate in South Carolina and provided some investors with false balance sheets, profit-loss statements, analyses of partner accounts and other records reflecting that the investors were partners in Old Bay Investments and had earned substantial returns on their investments.  Ring also provided similar false documents to other investors in an effort to lead them to believe that they were partners in an investment vehicle called OB Enterprises, LLC, when in fact Ring had not established any such company.

Ring diverted investor funds to pay for accounting fees incurred by one of Fisher-Ring’s clients, an individual for whom Ring performed services, and provided investors’ and the firm’s funds to the individual as well as the individual’s business and creditors.  Ring diverted funds from Fisher-Ring’s operating account into the bank account Ring managed; diverted investor funds to a business owned by another investor, claiming that the money was a loan Ring had obtained from a bank; and provided Fisher-Ring and the investors’ funds to two organizations, claiming they were charitable donations.

Ring faces a maximum sentence of 20 years in prison followed by three years of supervised release.  He is scheduled to be sentenced on July 31, 2007.

mortgage fraud