San Francisco, California - On July 26, a federal grand jury in San Francisco indicted former Bay Area resident Michael James Frew charging him with wire fraud, mail fraud, and money laundering announced Acting United States Attorney Alex G. Tse, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Acting Special Agent in Charge Internal Revenue Service (IRS-CI) Tara Sullivan. The indictment was unsealed today following Frew’s arrest in Beatty, Nevada, on the charges.
According to the indictment, beginning no later than 2010, Frew, 70, formerly of Hillsborough, Calif., solicited investments from numerous individuals on the premise that their money would be invested into real estate in the United States and abroad. After receiving misrepresentations in connection with Frew’s solicitations, several victim investors provided funds to Frew for the purpose of allowing him to invest funds on their behalf. In fact, Frew used these “investments” primarily to support his personal lifestyle, to speculate on the stock market using an account in his name, and/or to repay other victims a portion of their investments.
The indictment alleges that Frew convinced his victims he would make investments into real estate in the United States and foreign countries in areas under recent distress from natural disasters. The indictment describes how Frew allegedly persuaded one couple to transfer to him $380,000 in cash for the purpose of making investments in foreign real estate and a short term investment that would yield a 10% return. Nevertheless, instead of investing the money as he promised, Frew used the money to make expenditures for personal expenses, to speculate on the stock market, and to repay other victim “investors.” The indictment describes similar transactions between Frew and four other victims during the period 2010 through 2014.
In sum, the indictment charges Frew with two counts each of wire fraud, in violation of 18 U.S.C. § 1343; mail fraud, in violation of 18 U.S.C. § 1341; and money laundering, in violation of 18 U.S.C. § 1957.
After his arrest, Frew made his initial appearance in United States District Court in Las Vegas, Nevada, and was released on certain conditions, including that he give up his passport. A local initial appearance in San Francisco is scheduled for August 21, 2018, before U.S. Magistrate Judge Jacqueline Scott Corley.
An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment on each count of wire fraud and mail fraud, and 10 years’ imprisonment on each count of money laundering. In addition, Frew faces fines of $250,000 on each count in the indictment and restitution for the losses he is alleged to have caused. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Robert David Rees is prosecuting the case with assistance from Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the IRS-CI.
