B. Don James, the man accused of defrauding dozens of people in a so called \"Ponzi scheme\" has been indicted by a federal grand jury charging him with over $1.8 million in wire fraud.
In a prepared news release, United States Attorney Craig S. Morford announced Wednesday that James, an insurance broker from Smithville, was indicted on fifteen counts of wire fraud. James was arrested Wednesday on a warrant issued in connection with the indictment.
The charges stem from James' participation in a scheme to defraud investors in insurance premium financing contracts.
The indictment charges James with representing to investors that their funds would be used to purchase insurance premium financing contracts when, in fact, James knew that he would not use the funds in that manner. In addition, the indictment alleges that James told the investors that the only way for them to lose their money was if he stole it.
The indictment specifically alleges fifteen instances in which James told investors that he would place their funds in insurance premium financing contracts when he had no intention of doing so. The total funds involved in these fifteen instances is over $1.8 million.
As defined in the indictment, insurance premium financing occurs when an individual purchasing an insurance policy elects to pay the premiums over an extended period. When the insured individual makes that election, that individual typically pays an additional amount beyond the cost of the premium that would be due had the insured made the payment in full at the time that insurance coverage went into effect. Because of this payment, there is a market where insurance companies sell the contracts for extended payment policies to third parties. The third party makes the premium payment to the company at the time the coverage policy begins and receives both the premium and the additional amount in payment from the insured individual, thereby permitting the outside investor to profit from the arrangement, the insured individual to pay over an extended period, and the insurance company to receive the full premium payment at the beginning of the coverage.
The investigation into James' conduct was led by the Federal Bureau of Investigation and Assistant U.S. Attorney Sam Williamson is leading the prosecution.
An indictment merely represents an accusation, and the defendant is presumed innocent until and unless he is proven guilty.