Columbia, South Carolina ---- United States Attorney Beth
Drake stated today that Melvin Leonard Wimmer, Jr., age 53, of Greenwood, South
Carolina has entered a guilty plea in federal court in Greenville, to
Securities Fraud, a violation of 18 U.S.C. § 1348. Senior United States District Judge Henry M.
Herlong, Jr., of Greenville, accepted the guilty plea and will sentence Wimmer
at a later date after he has reviewed the presentence report prepared by the U.S.
Probation Office.
Evidence presented at the guilty plea hearing established
that in 2007, Wimmer started an investment firm in Greenwood called Cornerstone
Capital. From 2010-2017, approximately
twenty-five (25) individuals invested $3.6 million with Wimmer. Wimmer pooled the money into one bank
account, and he traded primarily securities and stock futures and options. Wimmer invested in high-risk securities and
futures contracts. Of the $3.6 million
invested, Wimmer lost approximately $3 million.
Wimmer committed fraud by issuing fraudulent account
statements to his investors. Soon after
he started trading options and futures, Wimmer lost money, and he continued to
lose money throughout the scheme.
Instead of reporting the losses, Wimmer emailed his investors monthly
account statements that falsely listed gains of 8-10 percent on an annualized
basis. Wimmer manufactured and
distributed false account statements from the outset, and he continued until
the scheme collapsed. Wimmer also
falsely represented the expected gains from trading, including the past
performance of his trades, and he failed to inform the investors of the high
risk of trading futures and options.
Ms. Drake stated that the maximum penalty for Securities
Fraud is imprisonment for 25 years and/or a fine of $250,000.
The case was investigated by agents of the Federal Bureau of
Investigation (FBI) and the Securities and Exchange Commission (SEC). Assistant United States Attorney Rhett DeHart
of the Charleston office is prosecuting the case.
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