LITTLE ROCK, Ark. (KTHV) - A Little Rock man pleads guilty in $700,000 mail fraud case.
According to the U.S. Department of Justice and attorney Christopher R. Thyer, 42-year-old Lee Charles Johnson pleaded guilty in court Thursday.
Authorities say from January 2007 through May 2011, Johnson falsely ran TJC Group, Johnson Food Group, and Keystone Hybrid Fund, selling securities and investment opportunities to at least 46 couples, individuals, and entities. Johnson, however, wasn't licensed to give financial advice or to sell securities in the state.
Johnson admitted to authorities that each victim was told they would have individual accounts where their money would be deposited, and that the funds wouldn't be withdrawn from the account. Johnson drafted contracts guaranteeing the victims a 12-15 percent return on their investment.
Johnson then used that money for his own personal use, including paying for trips and vehicles. He also used the money to make child support payments and payments for his children's private school tuition.
One victim invested her military survivor benefits she received after her husband was killed in Fallajah, and another invested all of the life insurance benefits she received after her husband died. Each woman has had less than $2,000 returned to this day.
Authorities say that Johnson mailed maturity date letters to the victims to assure them the money they sent each month was being used for proper investment purposes, and that their accounts were fully protected.
The loss to date is $734,846.38.
According to the U.S. Department of Justice, the statutory penalty for mail fraud embezzlement is no more than 20 years in prison and a fine up to $250,000. Sentencing is pending.
Source: U.S. Department of Justice