Naperville businessman sentenced to 7 years in prison for fraud scheme
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A west suburban businessman who persuaded a dozen clients of his USA Retirement Management Services to invest more than $3.3 million in non-existent Turkish bonds has been sentenced to seven years in federal prison.
A jury in November convicted John T. Burns III of two counts of wire fraud and three counts of mail fraud. U.S. District Judge Charles Kocoras sentenced Burns on Thursday and also ordered the 56-year-old Naperville resident to pay $3,383,113 in restitution, according to a statement from the U.S. Attorney’s office.
Burns was a mortgage salesman with “no professional investment experience,” according to federal prosecutors, and he falsely claimed that he and his family had personally invested in the bonds, which did not exist. He also told clients, many of whom were retirees, that he had substantial experience investing money on behalf of clients, and that profitable returns on those investments were providing financial security to him and his family.
Evidence at Burns’ week-long trial revealed that he identified potential investors by conducting estate planning seminars in Illinois and California. He sent out mass mailings to lure people to the seminars, then used the seminars to schedule follow-up interviews with prospective clients, during which he pitched the uniquely profitable investment opportunity in Turkish bonds, prosecutors said.
“Despite having no prior experience in estate planning or handling investments for clients, the defendant held himself out as an experienced, certified estate planner” to gain access to financial records and pitch the Turkish bond investment to clients, Asst. U.S. Attorney Ryan Hedges argued in the government’s sentencing memorandum. “The defendant’s motive to lie was greed; pure and simple,” Hedges said, noting Burns received substantial commissions from USA Retirement Management Services for each client who pledged funds into the bonds.
Burns’ conviction was part of a larger scheme involving Robert Pribilski, 57, of Lisle; and Mahmut Durmaz, 45, formerly of Streamwood and Los Angeles, two principal members of USA Retirement Management Services, the statement said.
Taken together, the total scheme defrauded 120 defendants out of $28 million, according to the indictment.
Pribilski pleaded guilty last year to one count of wire fraud and is awaiting sentencing. Durmaz fled the United States in 2010 and is a fugitive believed to be residing in Turkey. USA Retirement Management Services, which had offices in Oak Brook Terrace and southern California, was shut down by the SEC in 2010, according to prosecutors.