Illinois Man Faces Up To 5 Years In Federal Prison After Pleading Guilty To Selling Unregistered Securities Via Mail/Email; Case Brought By Postal Inspectors, IRS, State

An Illinois man hawking a Yukon gold-mining venture via postal mail and email has pleaded guilty to selling unregistered securities, federal prosecutors said.

Jeremiah D. Jacob, 32, of Columbia, faces up to five years in federal prison, a fine of $10,000 and three years’ supervised release, the office of U.S. Attorney Stephen R. Wigginton of the Southern District of Illinois said.

The office also brought the criminal prosecution against alleged Pathway To Prosperity HYIP operator Nicholas Smirnow in 2010. Like the Smirnow case, the case against Jacob began with a probe by the U.S. Postal Inspection Service.

State and federal investigators, including the Illinois Securities Department and the IRS, worked with postal inspectors in the Jacob probe, prosecutors said.

“In selling and offering for sale the security, Jeremiah D. Jacob made use of the United States mail service and email communications in interstate commerce,” Wigginton’s office said.

The company Jacob was pitching “was, in fact, dissolved,” prosecutors said.

Even so, Jacob tapped an investor for $200,000 with the promise of an annual return of 15 percent, prosecutors said.

Some HYIP schemes tout unregistered securities and advertise returns that dwarf the returns Jacob purported to offer.

In the HYIP sphere, securities-registration violations are common, as are the sale of unregistered securities by MLM-style hucksters who troll the Internet in search of marks from whom they can “earn” commissions.

Some of the purported HYIP “opportunities” have been linked to companies that are dissolved or exist in a shell form to disguise tentacles of a financial-fraud scheme. Some of the “companies” do not exist in any real-world sense.

Although Jacob’s company was not an HYIP in the usual sense of the term, HYIP operators and purveyors are subject to the same securities laws that led to the prosecution of Jacob.

About the Author

Leave a Reply