Hilo man receives 87 months for fraud and tax offense

Published On: Mar 10 2014 10:15:00 PM HST
HONOLULU -

A 32-year-old man who committed fraud and tax offenses has been sentenced to more than seven years of federal prison time.

Justin Wade Smith, formerly of Hilo, was sentenced for engaging in an “advance fee” fraud scheme that netted him more than $1.2 million, and failing to file income tax returns

In court proceedings, Smith admitted asking people to “advance” money to him, and promising to repay the amounts with substantial interest once he obtained money from the family trust or law enforcement agency. But, Smith was neither an heir to a large trust or law enforcement and admitted he used the money received from others to support his own lifestyle.

According to the court documents, Smith ran his scheme from 2006 through 2012 in Hawaii and elsewhere, and obtained more than $1.2 million in cash, by Western Union or Moneygram wire transfers and the prepaid debit cards.

During court proceedings, Smith also pled guilty to willfully failing to file a tax return for the calendar year 2012, during which he received approximately $233,995 from his wire fraud scheme.

Under the plea agreement, Smith admitted failing to report total income of more than $1.02 million between 2007- 2012 and that the resulting tax liability was $185,386.

Smith received 87 months of prison time on the wire fraud counts, 12 months on the failure to file offense and has been ordered to pay restitution of $1,262,930 to the 33 victims of his wire fraud scheme. He also has to pay back taxes of $185,386 to the Internal Revenue Service.

Smith has been in custody since his arrest on August 22, 2013.

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