Thursday Dec 09 2010
Roseville man admits to role in $3m Ponzi scheme
By: Lien Hoang, The Press Tribune
In exchange, his sentence could be cut in half
Following an investigation by the U.S. Secret Service, a Roseville man has pleaded guilty to helping defraud investors of $2,975,352, court files show. In a plea deal with federal prosecutors, Barry Winnett confessed to pocketing $160,458 in a Ponzi scheme involving an unnamed co-conspirator, whom Winnett sent $564,241. Winnett, 49, appeared in federal court Thursday, when he was appointed public defender Matthew Bockmon. Neither was immediately available for comment. The defendant admitted to posing as an escrow officer, paying off investors with funds from 22 other investors, who believed their money would go toward real estate deals. His cooperation with the office of U.S. Attorney Benjamin B. Wagner requires Winnett to disclose all assets related to the scam. He waives his right to an indictment - which would have involved prosecutors presenting evidence to a grand jury - and will instead proceed by information. The compromise also prevents Winnett from pleading not guilty, subpoenaing witnesses, invoking the 5th Amendment or appealing a decision. In return, Winnett will not be charged with crimes beyond wire fraud. Prosecutor Matthew D. Segal will recommend a sentence no greater than the low end of a possible range, with a reduction of up to 50 percent "depending upon the level of assistance the government determines that the defendant has provided,” the agreement said. The sentence could decrease further if he continues to assist attorneys after the case ends. Without these recommendations, Winnett could have faced a maximum of 20 years in prison, three years of probation and/or a $250,000 fine. A judge can also order restitution. Prosecutors would not name the co-schemer, but presumably they have bigger fish to fry than Winnett, whose input should help them investigate the unidentified individual. Placer County sheriffs originally investigated, but would not comment because they handed the case over to the Secret Service. Money was transferred between New York and California, making it an interstate crime. A local Secret Service office did not return a request for comment. The investigation is part of "Operation Broken Trust," U.S. Attorney General Eric Holder’s nationwide blitz to root out investment scams. Officials say this is the first program of its kind, involving more than 500 criminal and civil defendants, 120,000 victims and $10.4 billion in losses. “Cheating investors out of their earnings and savings is no longer a safe business plan - we will use every tool at our disposal to find you, to stop you, and to bring you to justice,” Holder said in a release. Winnett will next appear in court Jan. 27 before Judge Morrison C. England, Jr. Lien Hoang can be reached at email@example.com.