Former Attorney Sent to Prison for a Decade in $7 Million Ponzi Scheme
|U.S. Attorney’s Office January 11, 2013|
HOUSTON—Billy Frank Davis, aka Bill F. Davis, a former attorney residing in Houston, has been sentenced to 10 years in federal prison for perpetrating a decade-long investment fraud scheme that victimized more than 20 investors of approximately $7.8 million, United States Attorney Kenneth Magidson announced today.
Davis pleaded to one count of wire fraud October 15, 2012. Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Davis a 120-month sentence, to be followed by a three-year-term of supervised release, before a courtroom packed with victims who were all wearing red ribbons as a sign of solidarity.
Although Davis pleaded guilty to a single count, he had admitted to the entirety of his fraudulent scheme and agreed to be held accountable for all of the losses incurred by his victims. He was also ordered to pay $7.8 million in restitution.
In handing down the sentence, Judge Hittner went above the sentence recommended by the U.S. Sentencing Guidelines. At the hearing, Judge Hittner read from a number of victim impact statements, most from victims who had known Davis for 20 years or more. One letter read as follows: “[Davis] exploited the most fundamental of human relationships and did it both knowingly and intentionally. He deserves the same level of consideration he gave his friends as he was robbing all of us—none.” Another victim described Davis as a “smooth talking parasite or predator who will do harm to more honest people if ever back on the street. He has stolen most all of my retirement cash and destroyed my marriage. I do not sleep.”
In addition to the victim letters read in open court, Judge Hittner allowed one victim to speak at the sentencing hearing. “Every cent Bill Davis stole was from a very good friend, and he took advantage of that friendship on every occasion,” the victim stated. After noting Davis’s ability to maintain his image of success helped enable him to commit his crimes, the same victim closed by saying: “Mr. Davis, as for your image, the last image I want to see of you is you being led away in handcuffs in an orange jumpsuit.” After pronouncing the sentence, Judge Hittner ordered Davis to be taken immediately into custody, where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
During the past 10 years, Davis, 68, held himself out to friends and potential investors as being involved in the real estate investment business.
While Davis did conduct some legitimate business activity during this time period, a substantial portion of the funds he solicited were simply part of a Ponzi scheme Davis was operating in an effort to satisfy old debts and to fund his personal lifestyle.
In acknowledging his criminal conduct at the time of his guilty plea, Davis admitted to using a variety of ploys to perpetuate his Ponzi scheme, all of which involved falsely representing to investors the existence or nature of various real estate investment opportunities, accepting funds from investors under such false pretenses, and then using the investor funds in a manner other than as represented to investors.
The case was investigated by the FBI and prosecuted by Assistant United States Attorney Jason Varnado.