Real Estate Ponzi Scheme Results in 118 Month Prison Sentence

Allison Tussey —  April 2, 2013 — Leave a comment

Joe Don Johnson, 43, Midwest City, Oklahoma, was sentenced by United States District Judge David L. Russell to serve 118 months in prison for conspiracy to commit money laundering in connection with a Ponzi scheme involving securities fraud.

Johnson was indicted by a federal grand jury on February 3, 2011, along with Brian William McKye, Bethany, Oklahoma, on a nine-count indictment. Following the indictment, Johnson fled the United States to the Philippines.

The case against McKye continued and McKye was found guilty of securities fraud and conspiracy to commit money laundering on November 17, 2011, following a three-day jury trial. Evidence from trial showed that from 2006 through 2009, McKye, did business as Global West Funding Ltd., Co. Global West Financial LLC, Global West Financial LLC, Sure Lock Financial LLC, Sure Lock Loans LLC, and The Wave-Goldmade Ltd. McKye used these businesses to market investment contracts whereby investors were guaranteed a monthly rate of return from 6.5% to 20% for 6 to 60 months.

Investors were told they had 100% total controlo of their money and that the investments were secured by risk free real estate notes. However, McKye was not a registered investment advisor or broker-dealer in the State of Oklahoma and he used the money he received from investors to pay his own personal and business expenses and some limited returns to investors to keep the scheme on-going. Through this Ponzi scheme, McKye defrauded 115 victim-investors out of over $4.5 million. McKye‘s companies were shut down by the Oklahoma Department of Securities in the spring of 2009.

In March of 2012, Johnson was apprehended in the Philippines and returned to the United States to face trial. On September 26, 2012, Johnson pled guilty to conspiracy to commit money laundering for his role in the Ponzi scheme involving McKye.

At the sentencing hearing, Judge Russell ordered Johnson to serve 118 months in federal prison, followed by three years of supervised release. In addition, Johnson was ordered to pay 4,592,610.68 in restitution to his victims. McKye was sentenced in April of 2012 to serve 262 months in prison, followed by three years of supervised release, and ordered to pay $4,516,208.97 in restitution to his victims.

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

This case was investigated by the Criminal Investigations of the Internal Revenue Service and prosecuted by Assistant United States Attorney Susan Dickerson Cox.

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Allison Tussey

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