Defendant Submitted False Financial Records to His Investors
Earlier today, defendant Thomas Donovan, 67, was sentenced
to 55 months of incarceration for his guilty plea to wire fraud conspiracy on
May 31, 2013. The District Court also
entered an order directing Donovan to forfeit more than $31 million that he
received and to pay more than $31 million in restitution.
The sentence was announced by Kelly T. Currie, Acting United
States Attorney for the Eastern District of New York, and Diego Rodriguez,
Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field
Office (FBI).
According to court filings and facts presented during the
sentencing proceeding, Donovan was the co-owner of Private Capital Group that
invested in sub-prime mortgages. Private
Capital Group’s main investor was Ficus Investments, Inc., which invested more
than $300 million. Rather than investing
those funds as agreed upon, the owners of Private Capital Group, Thomas Donovan
and Lawrence Cline, took more than $31 million for themselves and concealed
that theft by providing his investors with false and misleading financial
reports. Cline and Private Capital
Group’s chief financial officer, Christopher Chalavoutis, previously pleaded guilty and have been sentenced.
“Under the guise of rehabilitating and reselling distressed
mortgages, Donovan lied to his investors and stole their money. Donovan took advantage of the residential
mortgage crisis for his personal financial gain, and he has now been held to
account,” stated Acting United States Attorney Currie. Mr. Currie extended his grateful appreciation
to the FBI, who led the government’s investigation.
The government’s case is being prosecuted by the Office’s
Long Island Criminal Division. Assistant
United States Attorney Christopher Ott is in charge of the prosecution.
The sentence was imposed by the Honorable Joanna Seybert at
the federal courthouse in Central Islip, New York.
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