Justin Wade Smith, formerly of Hilo, pleaded guilty to two counts of wire fraud and one tax charge on Thursday in federal court in Honolulu.
U.S. Attorney for the District of Hawaii Florence T. Nakakuni said Smith, 32, engaged in a scheme to defraud involving the solicitation of money through various false representations. Smith’s false statements included telling others 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, and 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 to a large trust, or a law enforcement contractor, and he used the money from others to support his own lifestyle.
According to court documents, Smith ran his scheme from 2006-12 in Hawaii and elsewhere, and obtained more than $1 million in cash, Western Union or Moneygram wire transfers, and the “loading” of a prepaid debit card belonging to Smith.
During court proceedings, Smith also pleaded guilty to willfully failing to file a tax return for calendar year 2012, during which he received approximately $233,995 from his wire fraud scheme. Under the plea agreement, Smith admitted failing to report total income of $1,024,196 between 2007-12, and the resulting tax liability was $185,386.
Smith will be sentenced March 31. He faces maximum penalties of 20 years of imprisonment on each of the wire fraud counts, and up to one year of imprisonment on the failure to file tax return charge.
Smith will also be ordered to pay restitution to the victims of his wire fraud scheme, and pay up to $185,386 in back taxes, plus interest and penalties to the Internal Revenue Service.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation with the assistance of the Hawaii County Police Department. The prosecution was handled by Assistant U.S. Attorney Larry Tong.