ILNews

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

Back to TopCommentsE-mailPrintBookmark and Share

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.”
 

 

ADVERTISEMENT

  • 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>

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Access to the court (judiciary branch of government) is the REAL problem, NOT necessarily lack of access to an attorney. Unfortunately, I've lived in a legal and financial hell for the past six years due to a divorce (where I was, supposedly, represented by an attorney) in which I was defrauded of settlement and the other party (and helpers) enriched through the fraud. When I attempted to introduce evidence and testify (pro se) in a foreclosure/eviction, I was silenced (apparently on procedural grounds, as research I've done since indicates). I was thrown out of a residence which was to be sold, by a judge who refused to allow me to speak in (the supposedly "informal") small claims court where the eviction proceeding (by ex-brother-in-law) was held. Six years and I can't even get back on solid or stable ground ... having bank account seized twice, unlawfully ... and now, for the past year, being dragged into court - again, contrary to law and appellate decisions - by former attorney, who is trying to force payment from exempt funds. Friday will mark fifth appearance. Hopefully, I'll be allowed to speak. The situation I find myself in shouldn't even be possible, much less dragging out with no end in sight, for years. I've done nothing wrong, but am watching a lot of wrong being accomplished under court jurisdiction; only because I was married to someone who wanted and was granted a divorce (but was not willing to assume the responsibilities that come with granting the divorce). In fact, the recalcitrant party was enriched by well over $100k, although it was necessarily split with other actors. Pro bono help? It's a nice dream ... but that's all it is, for too many. Meanwhile, injustice marches on.

  2. Both sites mentioned in the article appear to be nonfunctional to date (March 28, 2017). http://indianalegalanswers.org/ returns a message stating the "server is taking too long to respond" and http://www.abafreelegalasnswers.org/ "can't find the server". Although this does not surprise me, it is disheartening to know that access to the judicial branch of government remains out of reach for too many citizens (for procedural rather than meritorious reasons) of Indiana. Any updates regarding this story?

  3. We have a direct genuine provider for BG/SBLC specifically for lease, at leasing price of 4+2 of face value, Issuance by HSBC London/Hong Kong or any other AA rated Bank in Europe, Middle East or USA. Contact : Mr. Johnson Hatton Email:johnsonhatton@gmail.com Skype ID: johnson.hatton007 Intermediaries/Consultants/Brokers are welcome to bring their clients and are 100% protected. In complete confidence, we will work together for the benefits of all parties involved. All inquires to Mr. Johnson Hatton should include the following minimum information so I can quickly address your needs: Complete contact information: What exactly do you need? How long do you need it for? Are you a principal borrower or a broker? Contact me for more details. Johnson Hatton

  4. I've been denied I appeal court date took a year my court date was Nov 9,2016 and have not received a answer yet

  5. Warsaw indiana dcs lying on our case. We already proved that in our first and most recent court appearance i need people to contact me who have evidence of dcs malpractice please email or facebook nathaniel hollett thank you

ADVERTISEMENT