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Idaho Man Agrees to Plead Guilty to Defrauding Investment Company of $3.1 Million
BOSTON, MA—A Boise, Idaho man was charged today and agreed to plead guilty in federal court with wire fraud in connection with a scheme to defraud an investment company of $3.1 million in order to buy and sell securities using the company’s money rather than his own.
United States Attorney Carmen M. Ortiz and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division, announced today that TIMOTHY PATRICK FLAHERTY, age 27, most recently of Boise, Idaho, was charged in an Information with one count of wire fraud.
The Information alleges that between September 10 and September 15, 2008, FLAHERTY, a customer of an investment company, initiated 31 separate electronic funds transfers (EFTs) of $100,000 apiece from his checking account at another company, a bank, into his investment account for a total of $3.1 million. When he initiated the first ETFs, FLAHERTY had less than $1,300 in his checking account. FLAHERTY knew that he did not have $3.1 million and that the investment company would advance him the funds before it verified the EFTs. The investment company advanced him the funds, and FLAHERTY used the funds to buy and sell stock until the EFTs were rejected. At that point, the investment company liquidated FLAHERTY’s stock purchases and lost over $547,000.
In an agreement filed separately in court, FLAHERTY agreed to waive indictment and plead guilty. The dates for the guilty plea and sentencing hearings will be set by the court. FLAHERTY faces up to 20 years of imprisonment, to be followed by three years of supervised release, a fine of $250,000 or twice the gain or loss, whichever is highest, and restitution.
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Scott L. Garland of Ortiz’s Computer Crime Unit.
The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until the court has accepted his guilty plea.
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