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Texas Lawyer Pleads Guilty In Vodka Investment Fraud
Source: Law360
By Rebecca McCray
January 07, 2015
A Dallas attorney pled guilty on Tuesday to mail fraud for sending fake emails to investors who accused him of misusing funds they entrusted to his company Dynasty Spirits LLC for vodka production as he planned a stock offering for the business.
This was the second guilty plea before Judge Irma C. Ramirez from Andrew Lee Siegel, who also pled guilty to criminal copyright infringement in July for replicating the logos and letterhead of The Northern Trust Co. and the Federal Reserve Bank to cover his tracks, bringing his total potential prison sentence up to 25 years, along with a potential fine of up to $500,000.
Siegel established Dynasty Spirits along with Dynasty Spirits Inc. and Speakeasy Distillers LLC in 2010, then received authorization in 2012 to sell up to $2 million in common stock shares of Dynasty.
According to the U.S. Attorney's Office for the Northern District of Texas, Siegel proceeded to profit unlawfully from his misguided investors.
"From September 2011 through July 2012, Siegel collected approximately $1,595,000 from 35 investors for the sale of Dynasty stock certificates. Siegel concealed from Dynasty owners that he unlawfully used up to $410,000 of that amount for his personal benefit," said the office in its announcement of his second guilty plea.
When investors began to suspect their money wasn't going where they intended it to go, Siegel sent fake bank emails to reassure them that he had tried to wire $185,000 in investor funds to the Dynasty account, but the wire had been misrouted.
Siegel's unlawful use of investor funds included taking $175,000 to issue 700,000 shares of Dynasty to himself in July 2012, according to the U.S. Attorney's announcement.
In 2013, he became a registered agent of Vanguard Spirits LLC, which was created to establish "Vanguard Vodka." He later disbursed more than $200,000 from a client's escrow account to pay off part of a legal settlement in a suit related to Dynasty.
The U.S. Attorney's office did not imeediately respond to a request for comment on Wednesday.
Counsel information for Siegel was not immediately available oin Wednesday.
Assistant U.S. Attorney David L. Jarvis is in charge of Siegel's prosecution for the Department of Justice, and Acting U.S. Attorney for the Northern District of Texas John Parker issued the announcement.
