Soooo Lucky: He Could've Got 300 Years in Prison for Ripping Off Seniors, But He Only Got 90 Years
|Courtesy of Orange County District Attorney|
|Jeffrey Gordon Butler readies for his 90-year stretch.|
Fortunately for him, the judge showed some leniency on Monday, sending Butler to the big house for a mere 90 years and eight months.
A jury in Orange County Superior Court on June 30 found Butler guilty of 693 felony counts of making untrue statements of material fact in the offer and sale of securities, the offer and sale of unqualified securities, theft from elderly persons, using a scheme to defraud in the sale of a security, and filing false tax returns for years 2001 through 2004. Due to the large number of criminal charges, it took two days for the verdict to be read. A Jan. 29 restitution hearing has been set.
The crime was all in the family: Butler's 49-year-old wife, Peggy Warmath Butler, was convicted of four felony counts of filing false tax returns and excessive taking sentencing enhancements. Over the objections of prosecutors, who advocated a minimum sentence of three years and four months in prison, she got a year in jail and seven months probation. However, she will have to serve seven years in prison if she violates her probation. The Mrs. could have got up to 10 years in the can.
Jeffrey Butler first met many of his victims while operating a company called Senior Information Services, which offered to assist senior citizens in the creation of living wills, trusts and other estate planning structures for a fee. He gained the trust of many clients who would become victims of his "Ponzi" scheme.
According to a statement from the Orange County District Attorney's office:
* Between 1995 and 2004, in a series of businesses that changed forms and names, Butler failed to provide his investors with any documents or other information about his companies, how the companies made money, or any of the risks of investing in the companies as required by law to protect consumers and investors. He transferred investments between companies on several occasions without informing or providing only limited information to his elderly investors--and immediately took 10 percent of the investors' money for himself without their knowledge or consent.
* He moved his clients' funds to his newest venture, Global Network Providers (Grenada), Inc. (GNPG), in 2000 without the knowledge of the investors. The clients' money went to the development of a "telecommunications" company supposedly located on the eastern Caribbean island of Grenada. The company had very few assets and no income.
* Butler convinced investors that GNPG paid 12 percent interest per year on promissory notes, when in fact the notes did not require payment for up to three years, and did not specify a time or method of payment. Investors were not made aware that these investments were not authorized to be sold in California.
* Some victims agreed to invest after being misled into believing that GNPG was an Individual Retirement Account (IRA) qualified investment, when in reality the investments were not IRA qualified. In an effort to fool his investors, Jeffrey Butler simply had "IRA" typed at the top of the promissory notes.
* He failed to inform many of the investors that the "telecommunications" company was based in Grenada. Being that GNPG was on the island of Grenada in the Caribbean, the company was not subject to U.S. laws.
* Butler eventually ran out of funds to maintain his scheme and sent his victims a letter in which he continued to lie to investors, claiming that Hurricane Ivan had caused a delay in payments.
* Peggy Butler maintained the financial records for each of her husband's companies and accounting for the deposits and expenditures of investor funds. Between 2001 and 2004, the Butlers filed false tax returns and failed to report income of more than $5.5 million, resulting in an unpaid tax liability of more than $530,000.
* In the end, Butler sold more than 300 promissory notes or stocks without obtaining a license for the notes from the California Department of Corporations, as required by law.