COLUMBIA, SC (WSPA) – A Greenwood man was sentenced to 75 months in prison after he issued fraudulent account statements to his investors.
According to a news release from U.S. District Attorney Sherri A. Lydon’s office, Melvin Leonard Wimmer, Jr., 53, was sentenced in federal court in Greenville on Wednesday for securities fraud.
Along with the 75 months in prison, Wimmer will be on five years supervised release after released from prison and was ordered to pay $3,056,000 in restitution.
According to the release, evidence revealed that Wimmer started an investment firm in Greenwood in 2007 called Cornerstone Capital. Around 25 people invested $3.6 million with Wimmer from 2010 to 2017.
Wimmer reportedly pooled the money into one bank accounts and he invested the money in high-risk securities and futures contracts.
“Wimmer committed fraud by issuing fraudulent account statements to his investors. Soon after he started trading options and futures, Wimmer lost money, and he continued to lose money throughout the scheme. Instead of reporting the losses, Wimmer emailed his investors monthly account statements that falsely listed gains of 8-10 percent on an annualized basis. Wimmer manufactured and distributed false account statements from the outset, and he continued until the scheme collapsed. Wimmer also falsely represented the expected gains from trading, including the past performance of his trades, and he failed to inform the investors of the high risk of trading futures and options.”
According to the release, of the $3.6 million invested, Wimmer lost around $3 million.
The U.S. Attorney’s Office release said much of the money came from the investors’ retirement savings.
“This prosecution illustrates the devastating impact that financial fraud inflicts on many Americans,” Lydon said. “Sadly, many of the victims in this case are elderly and lost all of their retirement savings. A free market system cannot function without integrity in the financial markets.”