Senior Couple found guilty of fraud

Ed Johnson, 60 and G. Carol Johnson, 66, were found guilty by a federal grand jury on October 29th of fraud, making illegal monetary transactions and conspiracy. The charges stem from the couple operating a corporate loan business that over the course of three years never issued a loan but collected over one million five hundred thousand dollars in fees.

The jury convened in a Delaware District courtroom and took approximately a day to reach a decision on the fourteen charges against Mr. Johnson and the twelve charges against his wife Carol. The couple is facing sentencing of twenty to thirty years in federal prison for each count of mail and wire fraud and the count of conspiracy. They have an additional sentence of five years each for their activities surrounding the illegal monetary transaction count. The Delaware District Jury also ordered the Johnsons to pay over one million five hundred thousand dollars to the government.

Prosecutors involved in the case charged that the Johnsons between 2003 and 2007 received twenty-one applications for loans and issued promises to issue over three hundred seventy million dollars in loans. The loans that Johnsons were to issue were for land purchases and the renovations of buildings. The company that the Johnsons operated received and accepted one million five hundred thousand dollars in fees from various loan applicants. The company never delivered on its promise to issue loans. Christopher Burke, Assistant United States Attorney in the case stated in his closing agreement that the number zero sums up the case. The Johnsons or one of their representatives would establish closings dates but continually failed to produce the funds or would push the funding dates back. The Johnson in one case actually closed one loan but never proceed the monies for funding.  The Johnsons as part of their scheme to defraud repeatedly strung their clients along in a matter that would allow the Johnsons to collect more fees.

Edson Bostic, Delaware Federal Public Defender for the G. Carol Johnson argued that the defendant in this case could only be accused of running a business that turned out not to be successful and that her only crime was that of unsuccessful business owner. He further noted that the governments own witnesses saw the defendant G. Carol Johnson as an honest, hard-working and professional individual. Bostic claimed that Johnson never intended to defraud anyone and that fault should be directed on other individuals within the company.

Christopher Koyste, Attorney for Ed Johnson claimed that Mr. Johnson did all he could as a business owner and was doing his best to attempted to make good on the loan applications.

The prosecution was able to produced evidence to show otherwise. The defendants’ case to show they were merely victims of bad luck proved to be a farce as well. The evidenced proved that the Johnsons knew they were unable to fund the loans when they arranged closing dates for their clients. The evidence also showed that the Johnsons provided statements that were dishonest in nature to their clients and to investigators that investigated the case. The prosecution was able to show that the Johnsons used company funds to live a lavish life style and pay for personal debts. The Johnsons spend over one hundred and fifty thousand dollars on jewelry, furs, restaurants and cash advances.

A witness in the case testified that Ms. Johnson told her that while most people are trying to keep up with the Jones, we are the Jones.

Prosecutors in the case are please with the result provided by the jury.

Bostic would not commit on the case and Koyste told reporters that he was disappointed in the verdict. Koyste again claimed that the governments own witness proved that the Johnsons were not running a scam with offices that did not exist. The government witness saw their business model as sound but the Johnsons were not successful in their endeavor. Koyste believes the verdict only proves that the Johnsons made some fraudulent statements but that the business they ran was not fraudulent in its operation.

Judge Joseph J. Farman has not scheduled a date for the couples sentencing hearing. He did order a presentencing investigation to take place.