The U.S. Department of Justice announced that a California man has been sentenced to five years in prison for investment fraud, according to InsuranceNewsNet.
Prosecutors said 58-year-old Joey Stanton Dodson orchestrated a scheme from 2012 to 2015 in which he defrauded investors out of over $15 million and diverted the funds for his own personal use.
The fraud occurred while Dodson was serving as executive chairman and managing partner of Citadel Energy, which purported to provide fluid-management services to oil and gas companies. In that role, he was responsible for raising funds and giving investors financial information about three limited partnerships affiliated with Citadel.
According to court documents, Dodson made false and misleading representations to investors about the intended use of their funds as well as the status of a potential acquisition and his own compensation. Prosecutors said he then pooled the funds from the limited partnerships and conducted multiple transfers between Citadel-related accounts to divert the money for his own benefit and conceal his actions.
“In total, Dodson fraudulently raised over $15.6 million from more than 50 investors and misappropriated $1.3 million in investor funds, which he used to pay for his personal expenses and to repay earlier investors in unrelated entities known collectively as Duke Equity,” the Justice Department said. “After Dodson’s misappropriation was discovered, the limited partnerships were placed into bankruptcy and the investors suffered a total loss of their investments. “
Stanton pleaded guilty in the Northern District of California in June 2022 to one count of wire fraud and was sentenced recently by a federal judge. In addition to the five-year prison term, he was ordered to serve three years supervised release and to pay over $15.6 million in restitution.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (844) 651-2643 or through our online contact form for a no-cost evaluation of your matter.