theftlossdeduction.com

Julia Ann Schmidt of Texas accused of scheming people out of at least $500,000 in Ponzi scheme.

10/23/09 - The attorney for the 68-year-old Whitney woman accused of scheming people out of at least $500,000 entered a plea of not guilty Thursday in federal court.

Bill Johnston, Julia Ann Schmidt’s Waco-based attorney, entered the plea in U.S. magistrate Judge Jeffrey C. Manske’s court to waive an arraignment hearing that was scheduled for Thursday afternoon.

Schmidt was not booked into jail but surrendered to Federal Bureau of Investigation officials Friday, when she learned there was a warrant for her arrest, a court spokeswoman said.

She is out of jail on a personal recognizance bond.

The case is being transferred to the district clerk’s office, where a set of pretrial hearings will be scheduled.

http://www.wacotrib.com/news/content/ne ... iplea.html

Federal indictment details alleged Ponzi scheme involving 68-year-old Whitney woman

By Erin Quinn Tribune-Herald staff writer

Wednesday, October 21, 2009

A four-page federal indictment alleges that 68-year-old Julia Ann Schmidt pretended to be a field manager for a Belgium-based investment firm and even hired a man to impersonate a company official to steal more than $500,000 in a large-scale Ponzi scheme.

Schmidt, who federal officials say once worked in banking in Waco, will be arraigned at 2 p.m. Thursday at the federal courthouse in Waco. A federal grand jury last week indicted her on two counts of mail fraud. The Whitney woman was arrested Friday and is free on bond.

The indictment alleges that she told people she worked as a field manager for Fortis Investments at 2100 Sanger Ave. in Waco. A spokeswoman for the international firm said Tuesday that she had never been an employee and that the company has never had a presence in Waco. In fact, the address is an empty lot.

A woman matching Schmidt’s description answered the door Tuesday afternoon at her ranch-style brick home with a half-circle drive on Farm-to-Market Road 933 just south of Whitney. She said, “I don’t want to talk” when asked for her side of the story.

Neighbors in the area said they knew of Schmidt but had only casual dealings with her. The neighbors all said they were surprised to hear of the indictment.

Schmidt’s Waco-based attorney, Bill Johnston, had no comment regarding the case.

The indictment alleges that Schmidt falsely identified herself as an agent for Fortis and solicited people to establish investment accounts. Federal officials declined comment Tuesday about the number of alleged victims.

Schmidt told people that she was working for a man named Jack Layne at Fortis Investments, according to the indictment.

Between at least April of 2007 and May of this year, she is accused of soliciting money from clients by promising a 30 percent return on their investments, which she told clients would involve the Texas Ranger Hall of Fame and Museum, Hillcrest Baptist Medical Center and Waco’s river walk improvement project.

Spokesmen for Hillcrest and the city could not be reached Tuesday for comment. Byron Johnson, director of the Texas Ranger Hall of Fame and Museum, said he had no knowledge of Schmidt and had never received a call from anyone checking to see whether their money would indeed be invested in the museum.

“We don’t hire outside firms or individuals to solicit funding for us,” Johnson said. “I think it’s interesting that we haven’t been contacted by anyone relating to that.”

According to the indictment, Schmidt hired a man to pretend to be “Jack Layne Jr.” and said that “Jack Layne” had died.

Schmidt and “Jack Layne Jr.” met with investors to assure them that their money was safe because the accounts were being handled by a Waco law firm, the indictment states.

An FBI official said Tuesday that no other arrests are anticipated.

The indictment alleges that Schmidt arranged a meeting among herself, the victim investors and representatives from Life Insurance Co. of the Southwest. During the meeting, Schmidt “arranged for the investors’ nonexistent Fortis investment accounts to be rolled over into annuities” at the insurance company, the indictment states.

She told the representatives from the life insurance company and the victim investors that “the investors’ money, which totaled several hundreds of thousands of dollars, would be transferred from Fortis Investments” to the life insurance company after investors completed annuity applications, the indictment states.

To lend credibility to the annuity transfer, Schmidt completed an application for her and her husband to transfer “a nonexistent sum of” $500,000 from the investment firm to the life insurance company, the indictment states.

It states that Schmidt mailed the annuity applications to the Life Insurance Co. of the Southwest in Dallas from Foresters Financial Partners Inc. in Seguin.

A spokeswoman with Foresters said earlier this year, Schmidt had applied to be appointed a representative with the firm but never completed the application. Foresters is a financial partner with Life Insurance Co. of the Southwest. The Foresters spokeswoman said the firm has no office in Seguin.

Calls to the life insurance company Tuesday were not returned.

The indictment also alleges that Schmidt sent, via FedEx, life insurance applications addressed to Jack Layne in Waco from the Life Insurance Co. of the Southwest in Dallas. The indictment gives no more detail about the purported mail fraud.

The FBI is asking anyone who thinks they might have been victimized by Schmidt to call 772-1627.

If convicted, Schmidt faces up to 20 years in federal prison.

http://www.wacotrib.com/news/content/ne ... html?imw=Y

Whitney Woman Charged Federally for Alleged Role in Ponzi Scheme

10/23/09 - John E. Murphy, Acting United States Attorney, announced that in Waco, 68-year-old Julia Ann Schmidt of Whitney, Texas, stands charged with two counts of mail fraud in connection with a large-scale Ponzi scheme.

A federal grand jury indictment returned last week alleges that between April 2007 and May 2009, Schmidt fraudulently represented herself to unsuspecting individuals as an agent for Fortis Investments. On repeated occasions, she solicited money from clients promising to generate an approximate 30 percent return on their investments. Schmidt informed clients that portions of their investments would involve the Texas Ranger Museum, Hillcrest Hospital, and the Waco Riverwalk Project. As a result of her scheme, authorities believe Schmidt defrauded her victims of more than $500,000. According to the indictment, most, if not all, of the investors received neither their original investment nor the interest income.


This case is being investigated by the Federal Bureau of Investigation. If anyone believes they have been victimized by Schmidt as a result of her alleged scheme, you are asked to contact the Waco FBI office at (254) 772-1627.

Upon conviction, Schmidt faces up to 20 years in federal prison per count. She is currently on bond pending trial.

It is being prosecuted for the government by Assistant United States Attorney Greg Gloff.

An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.

http://www.americanchronicle.com/articles/view/125239

10/24/09 - Before a federal indictment last week accused Julia Ann Schmidt of Whitney of a large-scale Ponzi scheme, a 50-year-old businessman was driving the streets of Waco, looking to map the ruse that he claims cost him $100,000.

But address by address, Lynn Byrom says, he became more convinced that the business cards he’d been given were phony. The people he believed were ensuring big returns on his money had never heard of the woman he knew as Ann Schmidt.

In fact, the Sanger Avenue investment firm where he says he thought Ann Schmidt worked wasn’t an investment firm at all. Ann Schmidt told him, Byrom said, that she was being rewarded as a valuable employee of the firm with an exclusive investment deal open only to her friends and family.

Byrom drove to the address that he said the woman had included on all of his investment statements, only to find that it was a vacant lot in a Waco residential neighborhood.

“I’m mad at myself,” said Byrom, a grandfather of two who lives in a trailer home on 67 acres just south of Corsicana. “To think that I would allow someone, after all these years of not trusting anyone, to do this to me and my family. To think that I would open my wallet up to her, and my life’s savings up to her. I feel like a fool.”

Schmidt, the woman he alleges duped him for about two years, is charged with two counts of mail fraud. Her attorney, Bill Johnston of Waco, entered a not guilty plea Thursday in federal court. Schmidt, 68, surrendered to FBI agents Oct. 16 and is free on a personal recognizance bond. Johnston and a woman who answered the door at Schmidt’s Whitney residence refused to comment on the case.

The indictment alleges that between April 2007 and May 2009, Schmidt solicited money from people by promising a 30 percent return on their investments. An FBI official said she is thought to have stolen at least $500,000 from “several” victim investors, but he declined to give an exact figure.

The FBI is asking anyone who thinks they might have been victimized by Schmidt to call 772-1627.

Introduction to ‘Miss Ann’

Byrom said he was introduced to Schmidt by his best friend, who he says is related to her. Calls to the man for comment were not returned.

Byrom said his friend told him that Schmidt was a reputable figure in the Waco banking industry and was being offered a deal by her company, Fortis Investments.

A spokeswoman with the Belgium-based investment firm has since said the company has never heard of Schmidt and has never had a presence in Texas.

Byrom said he was skeptical and had never been interested in the stock market, but he trusted his friend’s opinion.

Byrom said he gave Ann Schmidt $5,000 in June 2008. The months passed and Byrom says he was sent regular statements that showed his money growing to sums he’d never imagined.

The bottom of each of the statements shown to the Tribune-Herald read: “This investment is not open to everyone. It is based on agent’s production and success of the company.” The statements were typed on white paper with no letterhead.

If Byrom ever questioned the woman he called “Miss Ann” about the money or discrepancies in her story, he said, she offered a plausible excuse or even cried. She was a sweet person, he said, who reminded him of “everyone’s grandma.”

Promising growth

On Feb. 12, 2009, Byrom was given a statement that showed his money had grown to $541,420. If he didn’t touch it until July 31, the statement said, he’d have $1 million. Another statement indicated that his money would grow from $15,000 to $40,000 in two months.

“It was like I was finally being associated with people who really had some position in life,” said Byrom, who said he’d never been handed anything in his life. “It’s like that banquet that you never got invited to. You were always looking in the windows. She made us feel like we finally had an invitation to that banquet.”

The indictment alleges that Schmidt had told clients that their money would be invested in Hillcrest Baptist Medical Center, the Texas Ranger Hall of Fame and Museum and Waco’s river walk improvement project.

“We weren’t investing in the stock market,” Byrom said. “. . . We were investing in things we could see.”

Byrom said he, “Miss Ann” and her husband met occasionally, either at her house or at various restaurants.

“She made us believe we were all family,” he said.

The woman always greeted him with a hug, he said, and left their meetings with “I love you.”

And he watched his money continue to grow.

“We were so happy,” Byrom said. “I was going to use this money to build a new home.”

Investors’ banquet

Earlier this year, Byrom said, she had a banquet for all the investors and representatives from Life Insurance Co. of the Southwest at a hotel in Hillsboro. He said there were at least 30 investors at the banquet.

Byrom said a surprise to all the investors was that Schmidt handed out annuity forms for everyone to fill out at the banquet.

According to the indictment, Schmidt told the representatives, as well as the investors, that “the investors’ money, which totaled several hundreds of thousands of dollars, would be transferred from Fortis Investments” to the life insurance company after investors completed annuity applications.

Chris Graff, a spokesman with National Life Group, parent company of Life Insurance Co. of the Southwest (LSW), said independent agents who are licensed to sell LSW products might have been present at the banquet, but no LSW employees were there. Graff said Schmidt has never been a representative of LSW.

To lend credibility to the annuity transfer, the indictment alleges, Schmidt completed an application for herself and her husband to transfer $500,000 from the investment firm to the life insurance company.

The indictment states that Schmidt sent, via FedEx, life insurance applications addressed to Jack Layne in Waco from LSW in Dallas.

Delivery mix-up

Graff said that the applications were sent to Jack Layne at Fortis Investments at 2100 Sanger Ave., which the FedEx delivery person knew was not an address. FedEx, Graff said, instead shipped the applications to the real Jack Layne, whose office is on Owen Lane.

Byrom said he received a call from Jack Layne, who was confused as to why he had received an annuity application of his.

An FBI official says Layne is a longtime, reputable insurance agent in Waco whose name was used by Schmidt to add credibility to her story. Layne has been helpful in the investigation, the FBI official said Friday.

According to the indictment, Schmidt had hired a man to pretend to be “Jack Layne Jr.” and told other investors that Jack Layne Sr. had died. The indictment states that Schmidt and “Jack Layne Jr.” met with investors to assure them that their money was safe because the accounts were being handled by a Waco law firm.

Byrom said he never met “Jack Layne Jr.”

After determining his money was gone and that he’d been victimized, Byrom said he began telling his Waco lawyer of his concerns. The attorney, Byrom said, advised him to take his findings to the FBI, which he did.

Now, Byrom said, he’s not only out of the invested money, but he’s alone. His best friend stopped talking to him. The friend didn’t believe, Byrom said, that his relative was capable of the deceit Byrom alleges.

He started taking his anger at Schmidt out on his wife, he said, and she recently left him.

“You want to sit here and just cry,” Byrom said. “What she did, even to members of her own family, was like a mother and father telling their children to walk into traffic.”

Other coverage

http://www.wacotrib.com/news/content/news/stories/2009/10/23/10232009wacponziplea.html

http://www.wacotrib.com/news/content/ne ... ponzi.html

http://www.wacotrib.com/news/content/ne ... ponzi.html

http://www.wacotrib.com/news/content/ne ... html?imw=Y