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Failure to register in Indiana opens door for state charges against Ponzi scheme mastermind

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A split Indiana Court of Appeals ruled a man at the center of an alleged Ponzi scheme that defrauded nearly 72 victims in Ohio, Kentucky and Indiana will have to face state charges even though he pleaded guilty to a federal indictment.

The Court of Appeals issued its rulings in a pair of cases from two different counties that involved the same defendant and the same crime.

In Jerry A. Smith v. State of Indiana, 24A01-1210-CR-469, from Franklin Circuit Court, and Jerry A. Smith v. State of Indiana, 15A05-1208-CR-411, from Dearborn Superior Court, the Court of Appeals affirmed in part, reversed in part and remanded.

While the appellate judges threw out a number of state charges because they constituted a double-jeopardy violation with the federal plea, the COA held that other state charges specific to Indiana statute could stand.

Judge Nancy Vaidik dissented with the majority’s decision, arguing it violates double jeopardy. She wrote the “hypothetical reasoning” of the majority ignores the directive of previous decisions. Specifically, she pointed to State v. Allen, 646 N.E.2d 965, 968 (Ind. Ct. App. 1995) which held that a conviction in any other jurisdiction barred a later prosecution in Indiana for the same conduct.

Smith along with Jasen Snelling are alleged to have run a Ponzi scheme from CityFund Advisory and Dunhill Investment Advisors Ltd. The pair told victims they were involved in day trading, were licensed to sell securities and could garner an unusually high returns on investment.

However, according to the federal indictment, they were not licensed to sell securities nor were the firms licensed brokerages. Smith and Snelling never invested their clients’ money but rather used the funds to enrich themselves.

Together, victims of this investment scheme lost more than $8.9 million.

On June 12, 2012, Smith pleaded guilty to federal charges, acknowledging the ploy.

Franklin and Dearborn counties filed their own charges against Smith related to the financial fraud. Smith filed a motion to dismiss all state charges, asserting they were barred by double-jeopardy principles.

In throwing out several state charges, the Court of Appeals agreed with Smith that they arose from the same conduct that was included on Smith’s federal conviction. But the few charges related to Smith not being a registered broker-dealer with the Indiana Secretary of State were related to separate conduct.

“There is not overlap between the failing to register counts in this proceeding and Smith’s federal conviction,” Judge James Kirsch wrote for the majority. “On the one hand, had Smith been registered as a broker-dealer, he would still have faced the federal prosecution for his fraudulent acts. On the other, had Smith sold legitimate securities, he would have still have faced prosecution in this proceeding for his failure to register as a broker-dealer.”
 

 

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  • BS
    When a panel of judges reach different conclusions there can be no conclusion. If there are 7 judges and 4 say yea an 3 say nay, is it yea because 1 more said yea than said nay? Nay I say, it is what it is, is the COA voting on what to have for lunch or deciding justice>

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  1. Bob Leonard killed two people named Jennifer and Dion Longworth. There were no Smiths involved.

  2. Being on this journey from the beginning has convinced me the justice system really doesn't care about the welfare of the child. The trial court judge knew the child belonged with the mother. The father having total disregard for the rules of the court. Not only did this cost the mother and child valuable time together but thousands in legal fees. When the child was with the father the mother paid her child support. When the child was finally with the right parent somehow the father got away without having to pay one penny of child support. He had to be in control. Since he withheld all information regarding the child's welfare he put her in harms way. Mother took the child to the doctor when she got sick and was totally embarrassed she knew nothing regarding the medical information especially the allergies, The mother texted the father (from the doctors office) and he replied call his attorney. To me this doesn't seem like a concerned father. Seeing the child upset when she had to go back to the father. What upset me the most was finding out the child sleeps with him. Sometimes in the nude. Maybe I don't understand all the rules of the law but I thought this was also morally wrong. A concerned parent would allow the child to finish the school year. Say goodbye to her friends. It saddens me to know the child will not have contact with the sisters, aunts, uncles and the 87 year old grandfather. He didn't allow it before. Only the mother is allowed to talk to the child. I don't think now will be any different. I hope the decision the courts made would've been the same one if this was a member of their family. Someday this child will end up in therapy if allowed to remain with the father.

  3. Ok attorney Straw ... if that be a good idea ... And I am not saying it is ... but if it were ... would that be ripe prior to her suffering an embarrassing remand from the Seventh? Seems more than a tad premature here soldier. One putting on the armor should not boast liked one taking it off.

  4. The judge thinks that she is so cute to deny jurisdiction, but without jurisdiction, she loses her immunity. She did not give me any due process hearing or any discovery, like the Middlesex case provided for that lawyer. Because she has refused to protect me and she has no immunity because she rejected jurisdiction, I am now suing her in her district.

  5. Sam Bradbury was never a resident of Lafayette he lived in rural Tippecanoe County, Thats an error.

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