A former Hilo man was sentenced Monday in Honolulu to more than seven years in federal prison for bilking victims of an “advance fee” fraud scheme that netted him more than $1.2 million, and failing to file income tax returns.
Justin Wade Smith pleaded guilty to two counts of wire fraud, based on his solicitation of money from others through false representations.
The 32-year-old Smith told victims and potential victims he would inherit money from a sizable family trust, once he paid certain fees and costs, and he was a contractor for a law enforcement agency and could generate large fees through drug seizures.
In court proceedings, Smith admitted asking people to “advance” money to him, promising to repay the amounts with substantial interest once he obtained money from the family trust or law enforcement agency. Smith admitted he was not an heir or a law enforcement contractor, and he used the money from his scam to support his own lifestyle.
According to court documents, Smith operated his scheme from 2006-12 in Hawaii and elsewhere, and obtained more than $1.2 million in cash, Western Union or Moneygram wire transfers, and the “loading” of a prepaid debit card belonging to Smith.
Under terms of a plea deal, Smith admitted failing to report total income of $1,024,196 between 2007-12, and the resulting tax liability was $185,386.
At sentencing, U.S. District Judge J. Michael Seabright sentenced Smith to 87 months for the wire fraud counts, and 12 months for failure to file, with the terms to run concurrently.
He also ordered Smith to pay restitution of $1,262,930 to the 33 victims of his wire fraud scheme, and back taxes of $185,386 to the Internal Revenue Service.