Additional defendants have been charged in a $50 million Ponzi scheme involving off-road tires.
According to an official release from the IRS, federal grand jury has indicted two Texas men for their roles in one or more alleged conspiracies involving wire fraud, money laundering and tax fraud.
Credit: Serhii Nemyrivskyi/Getty Images
Charges pending against John K. Eckerd, Jr., of Dallas, Texas, and Afif Baltagi, of Houston, Texas, were revealed yesterday. Eckerd is believed by prosecutors to be the leader of the multi-state scam.
Co-conspirator Jason E. Adkins, of Jackson, Ohio, was previously sentenced in this case. Todd Wilkin, of Hillsboro, Ohio, pleaded guilty to his charges and is currently awaiting sentencing in federal custody.
Eckerd, Baltagi, and their conspirators defrauded over 50 investors of upwards of $50 million. Per the IRS, between 2012 and late 2018, Eckerd represented himself to potential investors as an entrepreneur who specialized in off-road tires.
Baltagi was a logistics expert for a freight company, which gave him access to an oversized tire storage facility.
Credit: Tinnakorn Jorruang (EyeEm)/Getty Images
Prospective investors were allegedly told their money would be used to buy off-the-road tires at deeply discounted rates, and that the tires would subsequently be re-sold at significantly higher prices. These individuals were promised they would receive a 15% to 20% ROI within six months.
The conspirators, however, did not actually have a tire re-selling business and, in fact, rare bought or sold tires at all.
Instead, they laundered the money given to them by would-be investors by creating bank accounts for numerous fraudulent businesses. In addition to money laundering and fraud charges, Eckerd did not filed taxes for tax years 2016 and 2017.
The IRS notes that conspiracy to commit wire fraud has a 20-year maximum prison sentence. Conspiracy to commit money laundering also carries a potential maximum penalty of 20 years in prison. Finally, conspiracy to defraud the United States due to tax fraud is a federal crime that can carry up to five years in prison.
Keep in mind that Eckerd and Baltagi have only been indicted, not yet convicted, and remain innocent until proven guilty per U.S. law.
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