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Saying that courts are filled with fraud cases, a federal judge has sentenced a former Utah resident to nearly 19 years in prison for a scheme that bilked investors out of at least $15.2 million.
U.S. District Judge Robert Shelby called fraud a "significant problem" in sending Robert Holloway, 57, now of San Diego, to prison for what is an unusually long financial fraud sentence for Utah.
"Our courts are filled with cases in which people lose their retirements and investments because they were defrauded by people who lie to them," Shelby said at a hearing on Wednesday.
He pronounced the sentence just after presiding over a 5½-hour hearing in the separate American Pension Services case in which investors are out $24 million.
After a seven-day trial, a jury in August found Holloway guilty of five fraud charges and one of filing a false tax return.
Holloway operated an investment firm called U.S. Ventures LC between May of 2005 and April of 2007. He claimed that the company used a special commodities trading software that generated returns of 0.8 percent per day.
But evidence at his trial showed that U.S. Ventures actually lost $10 million in trading while Holloway created false daily reports showing profits.
The operation took in $33 million and Holloway used hundreds of thousands of dollars for personal expenses. Among expenditures were $57,000 on a Rolex watch, $26,000 on a Tiffany necklace, $24,000 on a BMW vehicle and $175,000 to pay off a mortgage, said Assistant U.S. Attorney Jason Burt.
Holloway's court-appointed attorney, Kevin Murphy, tried to convince Shelby that Holloway's conduct stemmed from a narcissistic personality disorder and perhaps bi-polar disease.
Shelby didn't buy that, nor did Holloway.
"I'm not particularly in agreement with the mental thing," Holloway said in addressing the judge. "I'm not stupid."
He said he was a Christian who prayed for his victims every night and felt "sick" about what he had done.
"The bottom line is, I'm sorry beyond belief," he said.
Holloway's former brother-in-law, David Story, said the fraud devastated his family.
"We lost our homes. We lost our cars," Story said. "We filed for bankruptcy."
Attorneys in the White Collar Section of the U.S. Attorney's Office for Utah say the sentence was one of the longest in memory, according to spokeswoman Melodie Rydalch.
"Justice has been done," she said, pointing to the $15.2 million in losses by 250 victims nationwide.
In a related case, Shelby sentenced Houston investment manager Robert Andres to four years and eight months in prison for orchestrating an investment fraud that caused $40 million in losses to investors.
Andres, 63, pleaded guilty in August to wire fraud for his operation of Winsome Investment Trust.
Andres poured about $25 million of investor monies into Holloway's company.