Plano, Texas Man Sentenced to Eight Years in Federal Prison for Running Fraudulent Advance Fee Scheme

DALLAS—Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Plano, Texas, was sentenced by U.S. District Judge Sam A. Lindsay to 96 months in federal prison and ordered to pay $1,074,725 in restitution following his guilty plea in January to one count of wire fraud in connection with a fraudulent advance fee scheme he ran. The announcement was made today by U.S. Attorney James T. Jacks of the Northern District of Texas.

In addition, according to the plea agreement, Molz will be ordered to forfeit property that was derived from proceeds traceable to his offense, including funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati, and real estate located on Cartwright Street in Irving, Texas.

Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud. In March 2011, Molz’s bond was revoked.

According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an “aged” corporations. These “aged” corporations purportedly had access to lines of credit that were available to the purchaser.

To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of “Frank Sullivan,” held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of “aged” corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a “Tier 1” corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a “Tier 2” corporation with a $250,000 minimum line of credit.

Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each “aged” corporation had additional benefits, including established “business trade lines,” a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.

During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any “aged” corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit stopfraud.gov

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Christopher Stokes. The forfeiture is being handled by Assistant U.S. Attorney John J. de la Garza.