NORTH CAROLINA: Jonathan Davey, Figure In Infamous ‘Black Diamond’ And ‘Divine Circulation Services’ Ponzi And Fraud Caper, Convicted On All Counts; Jury Returned Verdicts In 45 Minutes

breakingnews72UPDATED 7:08 P.M. ET (U.S.A.) Jonathan D. Davey, a Newark, Ohio, certified public accountant and purported hedge-fund manager, has been convicted of all four counts against him in the “Black Diamond” and “Divine Circulation Services” Ponzi and fraud schemes in the Western District of North Carolina.

A federal jury, according to prosecutors, took only 45 minutes to return four guilty verdicts against Davey, 48. Ten defendants previously were convicted for their roles in the fraud, and CommunityOne Bank was charged criminally. Davey, who was convicted of conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money-laundering and tax evasion, potentially faces decades in federal prison.

Davey was charged last year.

In a statement, prosecutors said Davey “used an elaborate network of shell companies to evade taxes and commit money laundering with the proceeds of the Ponzi scheme. In particular, Davey used an offshore shell company in Belize to funnel money to build a mansion in Ohio, creating a sham ‘loan’ by pretending that investors had ‘loaned’ investment money to the Belizean shell company that was then used to build Davey’s personal mansion.

Black Diamond principal Keith F. Simmons was sentenced in 2012 to 50 years in prison.

See statement by the office of U.S. Attorney Anne M. Tompkins.

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3 Responses to “NORTH CAROLINA: Jonathan Davey, Figure In Infamous ‘Black Diamond’ And ‘Divine Circulation Services’ Ponzi And Fraud Caper, Convicted On All Counts; Jury Returned Verdicts In 45 Minutes”

  1. When will Jonathan Davey be sentenced, and is it known when sentencing will be enforced?

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  2. Davey will be sentenced on January 15th, 2015 at 0930 in the federal district courthouse on West Trade Street in Charlotte, NC. Sentencing should be enforced within 60 days of 1/15.

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  3. Two SEC docs on Jonathan Davey today:

    http://www.sec.gov/litigation/admin/2015/34-75337.pdf

    http://www.sec.gov/litigation/admin/2015/ia-4134.pdf

    Outtake from the second link above:

    “On January 15, 2015, the U.S. District Judge in the criminal case sentenced Davey to 252 months in prison, followed by three years of supervised release, and ordered Davey to pay over $21.8 million in restitution to defrauded victims and to the Internal Revenue Service.
    On February 4, 2015, the U.S. District Judge signed a Judgment in a Criminal Case against Davey (the “Conviction”), ordering the sentence imposed at the hearing.”

    Patrick

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