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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. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  2. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  3. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  4. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  5. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

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