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U.S. Department
of Justice
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FOR IMMEDIATE RELEASE |
MEDIA INQUIRIES: KATHY COLVIN |
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MONDAY, MARCH 14, 2011
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AMERIFIRST EXECUTIVE SENTENCED TO 25 YEARS Fraud Involved Roughly 600 Victims and More Than $50 Million
According to evidence presented at trial, Bruteyn orchestrated offerings of promissory notes called Secured Debt Obligations (“SDOs”) that raised more than $50 million from approximately 600 investors living in Texas and Florida, many of whom were retired and all of whom were looking for safe and secure investments. Bruteyn personally met with investors, and he also arranged for brokers to sell the securities. In connection with the sale of securities, Bruteyn misled, deceived and defrauded investors by misrepresenting, and by failing to disclose, material facts concerning the safety of the securities. Among other things, Bruteyn falsely represented to investors that their investment was insured by Lloyd’s of London or Allianz, and that it was guaranteed by a commercial bank. Neither was true. Bruteyn also deceived investors about his own qualifications and trustworthiness, by claiming to hold an MBA from the prestigious Wharton School at the University of Pennsylvania, and claiming to hold securities licenses when in fact he had been barred from the brokerage business by the NASD. One of those brokers who sold the SDOs, Vincent John Bazemore, Jr., 36, of Denton, Texas, was prosecuted in the Northern District of Texas, pleaded guilty in October 2007 to his role in the scheme, and is currently serving a 60-month federal prison sentence. Bazemore was also ordered to pay nearly $16 million in restitution. In other related cases in the Northern District of Texas: ∙ Gerald Kingston, of Dallas, pleaded guilty in December 2007 to one count of conspiracy to commit securities fraud, stemming from his role in helping Bruteyn to manipulate the stock price of Interfinancial Holdings Corporation (ticker: IFCH). Acting at the direction of Bruteyn, Kingston bought and sold hundreds of thousands of shares of IFCH and effected matched trades to create the false impression of widespread interest in the stock. Kingston admitted that he derived more than $1.6 million in proceeds from his fraudulent sales of IFCH in the course of the conspiracy. ∙ Eric Hall, of Fort Myers, Florida, pleaded guilty in June 2008 to one count of securities fraud, based on his role in a scheme to defraud investors in an entity called Secured Capital Trust. ∙ John Porter Priest, of Ocala, Florida, pleaded guilty in September 2010 to one count of securities fraud based on his role in the Secured Capital Trust scheme. ∙ Dennis Woods Bowden, of Dallas, the former Chief Operations Officer of AmeriFirst Funding Corp. and AmeriFirst Acceptance Corp. was indicted in May 2010 by a federal grand jury in Dallas on nine counts of securities fraud and six counts of mail fraud. Sentencing dates have not yet been set for Kingston and Hall. Priest’s sentencing is set for April 4, 2011. Bowden’s trial date is set for June 6, 2011. Assistant U.S. Attorneys Alan Buie and Christopher Stokes, and Special Assistant U.S. Attorney Stephanie Tourk are prosecuting. ### |