A federal grand jury in Phoenix returned a 102-count indictment against former CPA Daniel Wise, 55, of Scottsdale, Ariz., for Mail Fraud, Wire Fraud and Transactional Money Laundering.
The indictment alleges that from June, 2005 through December, 2008, through a web of entities and bank accounts he created and operated, Wise fraudulently induced victims to “invest” approximately $66 million with false promises that he could earn victims high-yield rates of return by making short-term, high-interest hard money loans in real estate ventures. The indictment also alleges that Wise did not make the investments he promised to victims, but instead operated a Ponzi scheme by using money obtained from newer victims to pay off older victims. The indictment further alleges that Wise retained for his own use more than $1 million in tax funds from investor victims who were also his tax clients. During this Ponzi scheme, the indictment alleges, Wise greatly enriched himself by siphoning off around $7 million in victim funds for his own personal use and enjoyment.
Convictions for mail and wire fraud carry a maximum penalty of 20 years, a $250,000 fine, or both. A conviction for transactional money laundering carries a maximum penalty of 10 years in prison, a $250,000 fine, or both.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the U.S. Postal Inspection Service, and the U.S. Department of Labor – Employee Benefits Security Administration.
“Certified Public Accountants are entrusted to properly handle their client’s financial affairs,” stated Pete Zegarac, Inspector in Charge of the U.S. Postal Inspection Service’s Phoenix Division. “The joint investigation with our partners at the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, and the U.S. Attorney’s Office highlights just how devastating these types of investment fraud cases can be for the victims.”