Former Mormon Bishop Who Presided Over ‘Friend’s Investment Group’ Charged In Alleged Connecticut Fraud Scheme Targeting Church Members; Former Broker Charged In Alleged Tennessee Ponzi Scheme

Julius C. Blackwelder, the 59-year-old former bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints in Trumbull, Conn., has been charged with money-laundering, mail fraud and wire fraud.

“This defendant is alleged to have abused his position of trust as a leader in his church to defraud fellow church members and others out of hundreds of thousands of dollars,” said U.S. Attorney David B. Fein of the District of Connecticut.

Meanwhile, in Tennessee, federal prosecutors charged Brian Keith Miller of Maryville in a separate alleged fraud scheme.

Miller, prosecutors said, was a former securities broker who hatched a Ponzi scheme and sucked in the trusting locals. He was arrested Monday on charges of wire fraud, money laundering and filing false tax returns.

“Rather than investing the victims’ funds as promised, the indictment charges that Miller misappropriated investment funds to his own use and used a portion of the victims’ funds to pay other victims to lull them into believing that they were receiving payments on their investments,” the office of U.S. Attorney William C. Killian of the Eastern District of Tennessee said.

“The indictment also charges that Miller knowingly engaged in monetary transactions greater than $10,000 with the proceeds of the fraud scheme and filed false federal income tax returns for 2007 and 2008,” Killian’s office said.

In the alleged Connecticut fraud scheme, Blackwelder solicited members of his church congregation, claiming “that he would invest their money in safe, long-term commodities futures contracts, and that he was an experienced and successful commodities investor,” Fein’s office said.

But Blackwelder “used investors’ money to pay his own expenses, which included repaying earlier investors in the scheme, building a waterfront home in Stratford, and repaying personal bank loans,” prosecutors said.

One loan was a credit line from a bank that had received funds from the Troubled Asset Relief Program (TARP) program. An investigation by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the IRS, the Connecticut Department of Banking and the U.S. Postal Inspection Service followed.

Blackwelder’s fraud scheme had a comforting name, officials said: “Friend’s Investment Group.”

Even so, it was a scam that plucked $400,000 from victims, prosecutors said, noting that Blackwelder now resides in Utah.

The Miller Ponzi case in Tennessee was brought by the FBI and the IRS, prosecutors said.

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One Response to “Former Mormon Bishop Who Presided Over ‘Friend’s Investment Group’ Charged In Alleged Connecticut Fraud Scheme Targeting Church Members; Former Broker Charged In Alleged Tennessee Ponzi Scheme”

  1. I have a close friend in a position of religious trust. His family has always lived in rather humble circumstances given his prominence and access to money and influence. I told him I was watching him and his family like a hawk for any evidence of financial impropriety and that regardless of friendship I would be the first person to turn him in to both the church and the civil authorities. Regardless of Church or other affinity group, that’s how these frauds are stopped. Eternal vigilance is the price not only of freedom but of freedom from affinity scams.

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