NASHVILLE, TN—Donna Jones, 37, of Dickson, Tennessee, former Office Manager of Park Capital Management Group (PCMG) and personal assistant to convicted Brentwood financial advisor Michael J. Park, was sentenced yesterday by United States District Court Judge Aleta Trauger to 72 months in prison, and ordered to pay $8,199,954 in restitution, announced Jerry E. Martin, United States Attorney for the Middle District of Tennessee.
Joining Martin in the announcement were Martin P. Phanco, Inspector in Charge, United States Postal Inspection Service; Amy S. Hess, Special Agent in Charge (SAC) of the FBI's Memphis Division; Darryl Williams, Acting SAC, IRS Criminal Investigation-Nashville Field Office; Mark Gwyn, Director, Tennessee Bureau of Investigation; and Ricky V. Watson, Chief of Police, Brentwood, Tennessee Police Department.
On March 10, 2010, a federal grand jury returned a 17- count indictment charging Jones with conspiracy, mail fraud, wire fraud, bank fraud and money laundering for her role in the operation of a massive Ponzi scheme that defrauded investors of more than $12,299,690. On January 20, 2011, Jones pleaded guilty to charges of mail fraud and money laundering, admitting that between September 2001 and June 26, 2008, she, along with co-defendant Michael Park, operated a scheme to defraud investors who deposited funds with PCMG for investment in brokered stocks and other marketable securities.
In sentencing Jones, the Court found that she played an integral role in the execution of the Ponzi scheme and the concealment of the scheme from investors. "Jones jeopardized the hard-earned money of individuals and egregiously abused a position of trust with investors," said U.S. Attorney Jerry E. Martin. "Jones repeatedly encouraged people to invest by falsely promising security, growth and inflated returns on their money, but instead the investors lost their savings as part of an elaborate Ponzi scheme. The United States Attorney's Office will diligently and aggressively prosecute the perpetrators of such schemes."
"The U.S. Postal Inspection Service is committed to working with our law enforcement partners to ensure the U.S. Mails are not utilized as a tool to defraud victims in these type of Ponzi schemes, Inspector in Charge Martin D. Phanco, Atlanta Division."
"The efforts and cooperation among federal and state partners make it possible to bring to justice those who choose to violate trust, fiduciary duty, and the law for personal gain," said SAC of the Memphis Division of the FBI, Amy S. Hess. "The FBI will continue to work with fellow law enforcement agencies to target those who would seek to commit similar fraud schemes."
"As this case demonstrates, IRS Criminal Investigation agents were able to use their expertise to conduct a complex financial investigation, follow the paper trail and unravel violations of federal law," said Darryl Williams, Acting SAC, IRS Criminal Investigation - Nashville Field Office. "This case further demonstrates how effectively IRS Criminal Investigation agents work jointly with our federal and state law enforcement partners in investigating complex financial crimes."
At the sentencing hearing, Park, who is currently serving a 96 month sentence in federal prison for his role in the Ponzi scheme, testified that Jones maintained a spreadsheet on which she kept track of the fictitious PCMG investor accounts. According to Park's testimony, none of the funds listed in PCMG investment accounts were ever invested. Park testified that he and Jones pooled the investor funds and used the funds as their own personal bank account. Park further testified that, if an investor requested a withdrawal from a PCMG investment account, Jones would cover the withdrawn amount by transferring money from funds deposited by other investors and available in the pooled PCMG account. Such withdrawal requests sometimes necessitated that Jones and/or Park solicit additional funds from new or existing investors to cover any shortfall.
In order to conceal the scheme from existing investors, and to encourage future investment in PCMG, Jones fabricated documents designed to deceive investors into believing that their funds were being actively traded and managed, and that PCMG was generating and meeting promised growth expectations. Specifically, Jones created and provided clients with fictitious investment documents, including stock purchase and sale confirmations, quarterly account statements, summaries of investments, IRS Form 1099s, and invoices for account maintenance fees and commissions, which were regularly transmitted to PCMG investors and others using the United States Mail, e-mail and facsimile transmissions, and in-person.
Park also testified that, in order to falsely reinforce the point that funds invested with PCMG were safe, Jones suggested that the seal of the Securities Investor Protection Corporation (SIPC) should be placed on fictitious PCMG stock purchase confirmations and quarterly investment statements that were regularly provided to investors. In fact, PCMG was not a member of the SIPC, and the SIPC provided no protection for PCMG investors. The unauthorized use of the SIPC seal on false PCMG investment documents was intended by Jones to deceive investors into believing that their investments were safe.
As part of her day-to-day operation of PCMG, Jones had unrestricted access to the bank accounts of PCMG. Evidence produced at sentencing showed that Jones used the funds deposited in the PCMG bank accounts to pay her personal expenses, including the purchase of approximately $19,000 in clothes, home renovations costing more than $300,000, and approximately $225,000 in cash withdrawals that were deposited into defendant's personal bank account.
The case was investigated by the United States Postal Inspection Service, the Internal Revenue Service, the FBI, the Tennessee Bureau of Investigation, and the Brentwood Police Department. The United States was represented by Assistant United States Attorneys John K. Webb and Matt Everitt.
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