West Linn man pleads guilty to fraud charge
A West Linn man admitted to defrauding investors out of millions of dollars through empty promises Tuesday in federal court.
Charles Wesley Rhodes Jr., 56, pled guilty before U.S. District Court Judge Ancer L. Haggerty to one count of mail fraud and one count of money laundering. The charges could add up to 30 years in prison and $500,000 in fines.
Sentencing is set for Nov. 14.
'Greed and deception caused dozens of investors to lose millions in this case,' U.S. Attorney Karin J. Immergut said. 'The U.S. Attorney's office is committed to prosecuting those who engage in high-stakes investment schemes that involve fraud and deception. The victims in this case entrusted their hard-earned money with the defendant because he represented that he would invest it properly. Instead, he stole their money and used it to enhance his own lifestyle.'
According to information provided by the U.S. Department of Justice, Rhodes made various false statements to potential investors to secure their money. Rhodes claimed the money was invested in stocks and bonds. To cover up the diversion, Rhodes prepared false account statements and false IRS forms that reported false taxable income and dividend income earned in the faulty accounts.
The scheme began to collapse when the Securities and Exchange Commission filed a civil complaint in federal district court.
Rhodes ran the faulty investment firm, between 2001 and 2006, using investors' money to purchase exotic, luxury cars, open credit cards and loans and make lavish improvements to his West Linn home.