Fraudster Sentenced for Failed Development Project

Allison Tussey —  December 29, 2011 — 2 Comments

Derek Christopher Swann, 39, Norman, Oklahoma, was sentenced to serve 40 months in federal prison for money laundering related to a failed Edmond commercial and residential development called “The Falls.”  Earlier in 2011, Giovanni Bryan Stinson, 38, Edmond, pled guilty to conspiracy to commit securities fraud, in connection with raising investor proceeds for The Falls based on false information.

According to the Informations filed against Swann and Stinson, those two men decided in 2005 to try to build The Falls project in Edmond.  The next year, Swann, Stinson and others at their direction began soliciting private investors for money to develop The Falls.  Swann and Stinson acquired investor proceeds for The Falls based on false information and then used those proceeds for personal expenses and repayment of earlier investors.  According to the Informations, individuals invested more than $5 million into The Falls based on promises that the monies would be spent for engineering, architectural, or infrastructure costs.  Rather than paying for those expenses, Swann and Stinson used investor proceeds to pay for golf and entertainment expenses at a private Oklahoma City golf club, to lease BMW cars for The Falls’ officers, and to repay earlier investors.  The Falls project was never completed. 

On February 28, 2011, Swann pled guilty to one count of money laundering.  At the plea hearing, Swann admitted that he helped to convince a Texas investor to wire $255,000 to a local bank for the Edmond project.  Swann further admitted that after receiving those funds, he transferred the money to another account and used some of those funds for purposes not disclosed to the investor.

United States District Judge David L. Russell sentenced Swann to 40 months in federal prison, followed by three years of supervised release.  Swann was also ordered to pay $4,334,900.01 in restitution to more than two dozen investor victims. 

Earlier in 2011, Shawn Patrick Linn, 42, Edmond, and Mark A. VanHoose, 32, Edmond, pled guilty to federal conspiracy charges in connection with financing for The Falls.  Both were sentenced to terms of probation and ordered to pay more than $40,000 in restitution to a local bank.  Sentencing for Stinson has not been set. 

Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced the sentence.

These cases were investigated by the Federal Bureau of Investigation, the United States Secret Service, and the Criminal Investigation Division of the Internal Revenue Service.  The cases are being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and Nick Lillard.

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Allison Tussey

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2 responses to Fraudster Sentenced for Failed Development Project

  1. Agree w/Steven J. Fromm, the punishment for these crimes is way too lenient. White collar crime is why this country is in such a mess. A few of the small potatoes like this guy get a light sentence if anything, and big business crooks have not been prosecuted at all…they simply pay a fine and get out of it, if anything even happens to them. Some of the most compelling evidence came from the FBI in the early 2000s when the agency published crime reports (white collar/financial/mortgage fraud) saying it was so rampant it’d take out the economy and was being done by the industry 80% of the time. Perhaps that was even a conservative figure, since “consumers” cannot create and sell toxic loans, invent pyramid schemes, etc, as they don’t have the financial knowlege to pull it off. It was the industry that created and allowed the things that took out the economy, in some cases actually committing crimes to do it. Many CEO’s of well known businesses would be in jail, albeit light sentences, if they hadn’t paid the fines to settle w/the govt.

  2. Forty months! It should be 40 years. The restitution will never happen and these type of people are incorrigible sociopaths. This is a really bad problem and some things will never change.
    The real problem is that we as a society are not very financially education and this stuff happens to people all the time.

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