Janamjot Singh Sodhi,35, of Fresno, a former investment advisor, pleaded guilty today to four counts of mail fraud and one count of wire fraud in connection with a scheme to defraud investors, United States Attorney Benjamin B. Wagner announced.
According to court documents, from 2005 through September 2011, Sodhi, as owner of Elite Financial Inc., solicited investments from individuals using false pretenses, promising various investment opportunities with high rates of return in a relatively short period of time. He did not use the investors' funds for the stated investment purpose, but instead used the funds to pay returns to other investors and personal expenses for himself and others. Sodhi admitted that, to lull investors into believing that their funds were secure and were being used for their intended purpose, he periodically sent them false financial statements purportedly showing the investments made on their behalf. Sodhi admitted that he had not made the investments described on the financial statements. When investors requested a return of their investments, Sodhi stalled and delayed through a variety of falsehoods. In some cases, he repaid certain investors with funds from newly acquired investors. In other cases, he provided investors with repayment checks that were insufficient, counterfeit, or drafted on a closed account.
According to the plea agreement, Sodhi never disclosed to his investors that in January 2006 the New York Stock Exchange permanently debarred him, or that he was never certified by the California Department of Corporations to operate as an investment adviser in California. In January 2009, the California Department of Corporations ordered Sodhi to cease and desist from engaging in the business of an investment advisor in California. Despite his debarment and lack of certification, he continued to hold himself out to clients as a financial advisor who could buy and sell securities on behalf of clients. The total losses attributable to his scheme were approximately $2.3 million.
This case is the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant U.S. Attorneys Kirk Sherriff and Christopher Baker are prosecuting the case.
Sodhi is scheduled to be sentenced on April 29, 2013 at 8:30 a.m. The maximum statutory penalties are 20 years in prison and a $250,000 fine on each mail fraud and wire fraud count, and up to three years of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables, and any applicable statutory sentencing factors.
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