Former Lebanon CPA sentenced for $12 million ponzi scheme
A former certified public accountant in Lebanon, Missouri, was sentenced in federal court today for engaging in a $12 million scheme to defraud dozens of victims across the United States.
Douglas A. Richardson, 47, was sentenced by U.S. District Judge M. Douglas Harpool to 188 months in federal prison without parole. The court also ordered Richardson to pay $8,832,830 in restitution to his victims.
On Nov. 7, 2019, Richardson was found guilty at trial of all 10 counts of a federal indictment that included six counts of wire fraud and four counts of money laundering.
Richardson, a certified public accountant until his license was revoked, engaged in a decade-long Ponzi scheme. The government presented evidence at today’s sentencing hearing that Richardson defrauded numerous victims across the United States out of a total of approximately $12 million. As a part of this scheme, Richardson knowingly fleeced several elderly victims out of most, if not all, of their retirement savings.
Richardson used the proceeds of the scheme to support a lavish lifestyle that included a $1 million home, regular family vacations to Disney World, and such purchases as a 2016 Chevrolet Corvette Stingray valued at over $102,000, two motorhomes (one of which was valued at $325,000), a Dodge Challenger Hellcat, three Harley Davidson motorcycles, a Jeep Wrangler, and a 2015 Chevrolet Suburban valued at over $50,000.
Richardson owned his own company, Douglas A. Richardson, CPA, LLC. He was the former chief financial officer, treasurer, and CPA of Smart Prong Technologies, Inc., headquartered in Tulsa, Oklahoma, from December 2013 to June 2016. Smart Prong developed technology and manufactured devices for charging cell phones.
Richardson engaged in a scheme to defraud Smart Prong and several of the clients of his CPA firm from February 2014 to October 2016. Richardson transferred at least $4.4 million from Smart Prong bank accounts into his personal and business bank accounts. Richardson also solicited loans from several clients and induced them to make investments. Richardson made representations to these clients that he knew were false, in that he told them their loans and investments would be used for a certain purpose. In reality, Richardson used at least part of the money for his personal benefit, and to pay other individuals (including prior investors and others to whom he owed money).
For example, Richardson solicited one of his clients to participate in a promissory note program through which the client could earn money from interest on loans he and Richardson would enter into for the purpose of investments. Richardson claimed the loans would be used to provide funding for a real estate deal and an automobile dealership. The client loaned Richardson $365,000 from his business, which Richardson used to repay $230,000 to another individual for unrelated loans, to pay $72,704 to pay off the Chevrolet Corvette, and to issue a $7,500 check to himself.
Evidence at today’s sentencing hearing revealed an even larger fraud scheme that involved more victims over a longer period of time.
Richardson began his fraud scheme after his excavation company failed. In an attempt to recoup his money from the failed business and support his lavish lifestyle, he began the Ponzi scheme whereby he “borrowed” money under the guise of investments from individuals to pay back other individuals, while also taking a cut from the loan and/or investment proceeds for himself. Over the course of the next decade, Richardson executed his scheme, moving money from one creditor to the next, all the while misrepresenting what the loan/investment proceeds would be used for and taking some of the proceeds for himself, unbeknownst to his lenders.
The government also presented evidence at today’s sentencing hearing that Richardson continued his fraud scheme even Richardson defrauded one victim out of approximately $97,650 while awaiting sentencing. Richardson obtained $800 from a victim’s bank account during his jury trial without the victim’s knowledge and consent.
This case was prosecuted by Assistant U.S. Attorneys Casey Clark and Patrick Carney. It was investigated by the U.S. Postal Inspection Service, the FBI, and the Missouri Securities Division.