Woman Sentenced in Wetzel County Budget Finance Ponzi Scheme
WHEELING – The kingpin of an investment crime that Wetzel County Prosecutor Timothy Haught has called the largest Ponzi scheme in West Virginia history was sentenced Monday to more than 10 years in federal prison.
U.S. District Court Judge Frederick P. Stamp of the Northern District of West Virginia sentenced Donna S. Brown, 66, of Clarington, to 10 years and one month in a federal prison on each of three felony counts against her, to be served concurrently.
That sentence came after she scammed a reported 800 or more investment accounts out of what could exceed $31 million, according to court documents.
“This is the absolute top of the advisory federal sentencing guidelines,” Stamp said, noting he chose the maximum amount per charge because of “the extreme seriousness of the offense” and harm against Brown’s numerous victims.
After prison, she’ll serve three years of supervised release.
A Ponzi scheme involves using money from new investors to pay existing ones.
After an agreement was reached, Brown pleaded guilty Oct. 24 to three felony charges in an information: mail fraud, wire fraud and money laundering.
Brown committed those crimes through an unlicensed investment business that she operated under the name of her Budget Finance Co. that was licensed only as a consumer lender, according to court documents.
Throughout the sentencing hearing Monday in Wheeling, Brown shook her head when victims accused her of taking their money to live a life of luxury that included extensive traveling, all at their expense.
Matthew Ewers spoke on behalf of himself and his mother.
“Watching her, I’m appalled,” he said of Brown. “I’m ticked off. People talk about her taking cruises with our money and stuff, and she’s shaking her head ‘no.’ Are you kidding me? That money’s got to be somewhere. I want to know where it’s at.”
Ewers said because of her crimes, he’s had to make major life changes, including moving back to the Ohio Valley from several states away, and selling his pension, all in order to help his mother.
“It’s unacceptable. It’s hideous. It’s devastating,” Ewers said.
When asked if she had anything to say, Brown apologized through tears about “how very sorry I am that I hurt so many people.”
“It was never my intent,” she said, adding she regrets that, when she saw the company failing, she didn’t report it. “I thought I could fix it – be the big hero. Everyone I hurt so badly financially, please, please forgive me.”
Also before Stamp sentenced her, defense attorney W. Kelly Johnson of Cincinnati urged the judge not to impose the maximum sentence. He said Brown has no criminal history, is 66 years old and has health problems. Her husband, Johnson said, is in his 80s and is very ill.
“She won’t be around during his declining years,” Johnson said.
Stamp waived fines against Brown, saying he wants her to pay as much as possible in restitution to her victims.
She will pay a $100 special assessment fine per felony count, however, and will be required to make good-faith payments toward restitution. During supervised release, that will be a minimum of $100 per month, but will actually be much more, Stamp said.
Stamp compiled a summary of the victim impact statements he received.
He said Brown’s actions led to victims’ health problems and lack of sleep. In many cases they’ve become insolvent, or they no longer have chances of obtaining higher education. It has robbed many of their financial future, and has eliminated inheritance.
In some cases, victims are now unable to enjoy time with family or have had to adjust their living arrangements. Some have even gone without food, Stamp said.
The federal government is still determining the amount Brown will have to pay in restitution, and is still collecting a list victims’ names and the amounts they invested in the scheme. Stamp will use that list, which is due by April 17, to determine restitution to victims.
West Virginia Attorney General Patrick Morrisey’s office assisted federal prosecutors by identifying approximately 200 investors and forwarding their information to investigators, according to a release from Morrisey’s office.
“Any victims’ recoveries will be limited to the amount of loss,” Stamp said, noting Brown does not have the ability to pay interest on the restitution, so he has waived that requirement.
The government, meanwhile, will work on securing Brown’s assets, including rental houses, to help pay back her victims, said Assistant U.S. Attorney Daniel A. Brown. However, instead of that money going to the government, it will be structured “so everything that’s forfeited goes toward restitution.”
Stamp said he is willing to recommend to the Federal Bureau of Prisons that Brown be incarcerated at its Lexington, Ky. facility, as requested by Johnson.
Brown must self-report by noon Feb. 23 to the institution the bureau chooses.
According to the plea agreement, Brown has waived her right to appeal, Stamp said. Her pre-sentencing report has been sealed.