Justin Wade Smith, age 32, formerly of Hilo, pled guilty on December 19, 2013, in federal court to two counts of wire fraud and one tax charge, growing out of his operation of an “advance fee” scheme.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that, according to information presented in court, Smith engaged in a scheme to defraud involving the solicitation of money through various false representations. Smith’s false statements included telling others that (1) he would inherit money from a sizable family trust, once he paid certain fees and costs, and (2) he was a contractor for a law enforcement agency and could generate large fees through drug seizures. In court proceedings, Smith admitted asking people to “advance” money to him and promising to repay the amounts with substantial interest once he obtained money from the family trust or law enforcement agency. Smith admitted that he was not an heir to a large trust or a law enforcement contractor and that he used the money received from others to support his own lifestyle.
According to the court documents, Smith ran his scheme from 2006 through 2012 in Hawaii and elsewhere and obtained more than $1 million in cash, Western Union or MoneyGram wire transfers, and the “loading” of a prepaid debit card belonging to Smith.
During court proceedings, Smith also pled guilty to willfully failing to file a tax return for the calendar year 2012, during which he received approximately $233,995 from his wire fraud scheme. Under the plea agreement, Smith admitted failing to report total income of $1,024,196 between 2007-2012 and that the resulting tax liability was $185,386.
Smith will be sentenced on March 31, 2014, by United States District Judge J. Michael Seabright and will face maximum penalties of 20 years of imprisonment on each of the wire fraud counts and up to one year of imprisonment on the failure to file tax return charge. Smith will also be ordered to pay restitution to the victims of his wire fraud scheme and to pay up to $185,386 in back taxes, plus interest and penalties to the Internal Revenue Service.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, with the assistance of the Hawaii County Police Department. The prosecution was handled by Assistant United States Attorney Larry Tong.