Former Hilo Man Pleads Guilty to Wire FraudDecember 20, 2013, 11:09 AM HST (Updated December 20, 2013, 11:12 AM)
A 32-year-old former Hilo man faces a maximum sentence of more than 40 years in prison after he pleaded guilty Thursday to charges of wire fraud in Honolulu federal court.
Prosecutors said Justin Wade Smith took more than $1 million in “advance” money from his victims by making various false claims in a scheme that lasted from 2006 to 2012. Smith received the money in the form of cash, money wire transfers and the “loading” of a prepaid debit card.
Smith was arrested in Hilo in August on 39 counts of wire fraud involving victims on the Big Island, Oahu, Maui and in Las Vegas.
He later entered into a plea agreement which had him plead guilty to two of those counts and a single count of failing to file a tax return for the 2012 tax year, in which he received approximately $233,000 from his wire fraud scheme.
In all, Smith failed to report total income of $1,024,196 between 2007 and 2012, with a resulting tax liability of more than $185,000, prosecutors said.
When he is sentenced March 31, Smith faces a maximum penalty of 20 years on each of the wire fraud counts and one year for failing to file the tax return.
He will also be ordered to pay restitution to the victims and to pay the back taxes plus interest and penalties.
Florence T. Nakakuni, US Attorney for the District of Hawaii, said Smith obtained the money through various false claims that included telling others that he would inherit money from a sizable family trust after he paid fees and costs, and that he was a contractor for a law enforcement agency who could generate large fees through drug seizures.
Nanakuni said Smith admitted in court that he convinced people to advance him money by promising he would later repay them plus substantial interest. Smith acknowledged that he used his ill-gotten proceeds to support his lifestyle.
The case was investigated by the FBI and Internal Revenue Service with the assistance of the Hawaii Police Department.