A key player in a $13 million international fraud scam has been sentenced to eight years and one month in prison and ordered to pay $4.1 million in restitution.
James Michael Johnson, 69, of Richmond, was convicted in a jury trial last October of conspiracy to commit wire fraud, wire fraud and conspiracy to launder money. James Leonard Smith, 54, of Midlothian, a co-defendant, is set to be sentenced on May 27.
Johnson was sentenced Friday by U.S. District Judge Henry E. Hudson. In December, Hudson sentenced a third man in the scheme, Stuart Jay Anderson, 52, a lawyer from Aliso Viejo, Calif., to four years and ordered him to pay $5,715,578.21 in restitution.
A fourth man indicted in the case, Brian Michael Bridge, of London, the owner of Chimera Group Ltd., remains a fugitive. Bridge allegedly worked with Johnson and Smith to operate an “advance fee” scheme through Chimera.
Authorities said that in advance payment schemes, promoters promise to pay the victims money later in exchange for an upfront advance payment.
The government said the actual and intended losses in the scheme amounted to $13,750,030, though the actual loss to the victims was less than half that amount.
“The offense conduct here is incredibly serious. These crimes were not a one-time lapse in judgment. Rather, the offense conduct spanned years, Johnson abused the trust reposed in him by investors with whom he had long-standing relationships, and he inflicted significant economic harm on his victims,” wrote the U.S. attorney’s office in a sentencing memorandum.
In asking for a sentence within the federal guideline range of roughly 11 to 14 years, the government said that, “Many of the investors were individuals who could ill-afford to lose six-figure sums that represented years of personal savings or inherited wealth accumulated over a lifetime.”
Anderson’s lawyer, S.W. Dawson, asked for a lesser term, citing among other things Johnson’s lack of a prior criminal record and serious health problems. Johnson is also the sole caregiver for his mother and the only support available for a son with health problems.
However, in asking for a sentence within the guidelines, the government wrote that, “For more than four years, Johnson solicited funds from investors acting on behalf of Chimera Group Ltd., a shell entity whose sole apparent purpose was the facilitation of fraud.
“Johnson had developed relationships with many of these investors during a lengthy career as an investment advisor that abruptly ended when he lost his registration with the Financial Industry Regulatory Authority (FINRA). The bilked investors included individuals, start-up business entities, and a volunteer fire department on the Eastern Shore of Virginia.”
Johnson had a more culpable role than Anderson, who was sentenced to four years, and the only appropriate sentence for Johnson would be a substantial period of incarceration. “Johnson played a crucial and central role in this scheme,” prosecutors said.