Criminal Justice News

Tuesday, August 23, 2016

Financial Services Company Executive Sentenced to 15 Months for Obstruction of Justice



The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, was sentenced today in the U.S. District Court for the Western District of North Carolina to 15 months in prison for engaging in an elaborate obstruction of justice scheme to conceal from the government millions of dollars, which were subject to a freeze order and seizure warrant.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina; Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division; and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.

On March 23, Jaymes Meyer, aka James Meyer, 47, pleaded guilty to one count of obstruction of justice.  In addition to imposing the prison term, U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina entered a monetary judgment of $4.8 million against Meyer.

According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts.  As a result of its investigation, the SEC filed a civil enforcement action against RVG, resulting in an order freezing all of RVG’s assets and appointing a receiver to marshal, manage and distribute remaining RVG assets to impacted investors.  The U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants.  Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the freeze order and requested that Meyer freeze any RVG assets in his possession, custody or control.

According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets.  Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control after learning about the SEC’s investigation and used that money to purchase homes in Napa and the Turks and Caicos, and took additional measures to conceal his RVG assets.

Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.

In connection with his plea agreement, Meyer consented to the $4.8 million money judgment entered against him and forfeited the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense.

The U.S. Secret Service and IRS-CI investigated the case.  Assistant U.S. Attorney Jennifer Grus Sugar of the Western District of North Carolina and Trial Attorneys Kevin Lowell and Brian D. Frey of the Criminal Division’s Asset Forfeiture and Money Laundering Section – Bank Integrity Unit prosecuted the case.

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