Lynchburg, VA - A former independent financial advisor was sentenced Tuesday in the United States District Court for the Western District of Virginia in Lynchburg on fraud charges.
In October, Michael D. Leamnson, 56, of Roanoke, waived his right to be indicted and pled guilty to a two-count Information charging him with one count of wire fraud and one count of mail fraud.
Leamnson was sentenced to 40 months in Federal prison Tuesday Morning.
"In perpetrating his long-running Ponzi scheme, Mr. Leamnson stole money from his elderly clients and deprived many of their life savings," United States Attorney Timothy J. Heaphy said Tuesday.
"Leamnson falsely promised high investment returns, then used client funds for his personal benefit. This case shows our continuing commitment to prosecute investor fraud, particularly when such fraud targets vulnerable victims like our seniors. We will also continue to do what we can to warn our communities about fraud and encourage due diligence when evaluating investment opportunities," Heaphy said.
Leamnson previously admitted that he recruited investors for his company, Capital Creation.
The defendant promised his investors, many of whom were senior citizens, that he would invest their money in safe and accessible investments. Leamnson told investors they could access their principle "on demand," plus interest.
Leamnson admitted, however, that instead of using funds for safe investments, he instead deposited investor money into a general checking account which he used for personal expenses and outside business interests, including a small concrete company and a school fundraising business.
All told, Leamnson defrauded his investors out of nearly $1 million.
The investigation of the case was conducted by the United States Secrete Service, the
Internal Revenue Service Criminal Investigations and the Virginia State Police. Assistant United
States Attorneys Thomas Cullen and Daniel Bubar will prosecute the case for the United States.