Francis William Reimers pled guilty to charges by the Federal Bureau of Investigation and the Internal Revenue Service that he defrauded hundreds of mutual fund investors, accepting six counts of mail fraud and one count of money laundering, U.S. Fed News reports.
The government said that Reimers’ company, Advisory Services Group, promised investors returns of at least 9% by using a “regression analysis” program that could detect whether mutual fund values would rise or fall.
But instead of investing money, he used it for his mortgage, luxury cars, vacations, hunting trips and to finance two 403(b) and 457 fund administration companies he ran. He then paid investors in his fund management firm who wanted to redeem their shares or receive monthly dividends by dipping into the monthly payroll deductions that funded his fund administration companies.
To cover up his scheme, he sent bogus statements to investors that falsely indicated their money was invested in various equity and money market mutual funds.
Reimers, who will be sentenced on Aug. 3, faces up to 20 years in prison for each count.