Spokane, Washington - Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced today that Ronald Walter Hannes of Spokane, Washington, was sentenced after pleading guilty to Investment Advisor Fraud. United States District Judge Thomas O. Rice imposed a sentence of five years of probation. He also ordered Hannes to sell his assets, including his home valued at more than $700,000, in order to pay restitution to his victims.
According to court documents and information provided at sentencing, Hannes was the owner and operator of Hannes Financial Services, Inc (“HFS”). Through HFS, Hannes provided brokerage services to clients under the authority of Woodbury Financial Services.
In December of 2019, following complaints from one of Hannes’s clients, Woodbury Financial Services terminated Hannes’s employment and brokerage relationship. The Financial Industry Regulatory Authority (FINRA) later barred Hannes from acting as a broker or otherwise associating with a broker-dealer firm. The Federal Bureau of Investigation (“FBI”) also opened an investigation into Hannes after receiving information from the Washington State Department of Financial Institutions.
The FBI’s investigation established that Hannes engaged in a scheme to defraud at least 21 investors (“Victims”). The Victims were Hannes’s previous clients, who had established accounts through Woodbury Financial Services. Some of the Victims were Hannes’s friends, while others were referred to Hannes by family and friends. Hannes persuaded the Victims to invest in separate “high rate, tax free” bond investments. Hannes also convinced the Victims to write checks to HFS, or directly to third party companies at Hannes’s request, to invest in the bonds. Hannes also encouraged clients to “roll-over” their investments once their bonds purportedly matured. The investigation, however, revealed there were no bonds or securities attached to these investments. When a Victim demanded the return of their funds or chose not to “re-invest,” Hannes would provide a pay out to those individuals.
As part of the scheme, Hannes falsely claimed to his victims that he pre-purchased the bonds and that the victims’ money was being used to reimburse Hannes for bonds he had purchased in advance on their behalf. Hannes also provided his victims with fictitious account documents falsely indicating the amount of money the investors would make at maturity if they re-invested or requested a full redemption. Again, however, there were not actual bonds or securities connected with these investments.
Ultimately, investigators determined Hannes was operating several investment accounts where he received payment to invest in bonds that did not actually exist. An audit showed that between April of 2012 and March of 2020, approximately 288 checks were written from investors to HFS or entities associated with Hannes. In total, Hannes’s fraudulent scheme resulted in victims losing more than three-million dollars.
“Mr. Hannes’s clients trusted him with their hard-earned money and expected him to safeguard it. Instead, Mr. Hannes pulled them into a fraudulent scheme to enrich himself and leave his investors with nothing,” said U.S. Attorney Waldref. “Today I heard directly from the investors who Mr. Hannes swindled, and my resolve is further strengthened to protect the hard-working people of our community from investment schemes and hold fraudsters accountable.”
“This $3 million loss tragically represents investors’ careful savings, financial freedom, and hopes for the future,” said Richard A. Collodi, Special Agent in Charge of the FBI Seattle Field Office. “Not only did Mr. Hannes fail to provide honest investment services, but he also defrauded people he knew by taking advantage of previous business clients, friendships, and referrals for his own gain. Every one of the hundreds of checks he deposited into his own accounts was a betrayal of his responsibilities and relationships.”
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Patrick Cashman.
A video statement from U.S. Attorney Waldref can be found here.
Spokane, Washington – On February 21,2024, a federal grand jury for the Eastern District of Washington returned an indictment charging Christopher Lee Terry Sr., age 39, of Spangle, Washington, and his business, Allwest Financial LLC, with fourteen counts of fraud in connection with running a car import fraud scheme that defrauded multiple victims, including an auto finance company and a Canadian auto dealer, out of more than $5 Million between January 2019 and June 2020.
The Indictment alleges that Terry, through his auto wholesaling business, Allwest Financial LLC d/b/a Allwest Auto Remarketing (“Allwest”), defrauded auto financier NextGear Capital Inc. (“NextGear”), and Canadian auto retailer Birchwood Automotive Group Partnership (“Birchwood”), among others, by falsely and fraudulently claiming ownership of hundreds of vehicles that had been imported from Canada and which Allwest was supposedly refurbishing for potential re-sale.
The Indictment alleges that in order to qualify the imported vehicles as collateral for millions of dollars in advance loans from NextGear, Terry and his company used fraudulent documents purporting to show that the imported vehicles were owned, or were in the process of being purchased, by Allwest, when in fact they were not. The Indictment alleges that NextGear relied on Terry’s false and fraudulent representations, believed that Allwest owned the vehicles, that the loans were secured by the vehicles, and that the loans would be paid back once the vehicles were re-sold. However, as alleged in the Indictment, because Allwest did not in fact own the vehicles, any proceeds from any re-sale of the vehicles were owed to the true owner, such as Birchwood, leaving NextGear with outstanding, unsecured, and uncollectible loans to the tune of millions of dollars. In addition, the Indictment alleges that it was part of Terry’s fraud scheme for Terry and Allwest to at times pocket both the fraudulently obtained NextGear financing and the resale proceeds of the vehicle - thereby profiting twice from a vehicle Allwest did not own.
The Indictment alleges that when Terry’s fraud scheme was discovered NextGear, Birchwood, and others sustained losses of more than $5 million due to the scheme.
“Sophisticated business fraud schemes victimize both businesses and consumers and obstruct the ability of honest companies to transact business in an efficient and fair way,” said United States Attorney Waldref. “Regardless of the nature of the fraud, or what type of business, industry, or consumer it impacts and victimizes, we will work closely with our law enforcement partners to hold fraudsters accountable when they prey on innocent members of the community in order to line their own pockets.”
The fraud charges carry maximum sentences of up to 30 years in federal prison. This case was investigated by the Federal Bureau of Investigation, Spokane Resident Agency. Assistant United States Attorneys Tyler Tornabene and Dan Fruchter are prosecuting the case on behalf of the United States.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
United States v. Christopher Lee Terry Sr. and Allwest Financial LLC, Case No: 2-24-CR-27-TOR-2
Richland, Washington - Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced today that Ruben Galvan-Trujillo, was sentenced on February 7, 2024, after pleading guilty to Conspiracy to Distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. United States District Judge Mary K. Dimke imposed a sentence of 136 months imprisonment to be followed by 5 years of supervised release.
According to court documents and information disclosed at sentencing, the Drug Enforcement Administration (“DEA”) developed information that Galvan-Trujillo was a member of a substantial drug trafficking organization with ties to Chicago, Atlanta, Boston, New York, Michigan, and Washington. Galvan Trujillo would coordinate large drug shipments and cultivate new drug shipment lines for the DTO. Galvan-Trujillo had a base of operations in Los Angeles and lived in in Rancho Cucamonga, California.
The DEA used a confidential informant to contact Galvan-Trujillo and arrange a drug sale. In February of 2022, Galvan-Trujillo offered to sell 20 pounds of methamphetamine to the informant and arrange for delivery to Pasco, Washington. Per Galvan Trujillo, this was meant to be a test run to establish a drug distribution line to this District wherein his Drug Trafficking Organization would begin to send regular drug shipments in excess of 50 pounds of methamphetamine, cocaine and other product.
A few days later, Galvan-Trujillo called the informant and said the couriers were on the way and told the informant to pay the couriers $10,000 for the drugs and $80,000 for the product. Later than evening, the couriers delivered the drugs to the informant at a storage facility in Pasco, Washington. The drugs were hidden in a sophisticated trap car, wrapped in 20 individual packages, each containing approximately one-pound quantities of crystal methamphetamine.
“Mr. Galvan-Trujillo was a large-scale drug trafficker who was responsible for pushing massive quantities of illegal narcotics not just into Eastern Washington – but across all the United States,” stated U.S. Attorney Waldref. “My office will continue to prioritize protecting our communities by aggressively prosecuting drug traffickers who attempt to profit off this poison.”
“Mr. Galvan-Trujillo led a wholesale methamphetamine distribution ring that sought to harm both our community in Eastern Washington as well as cities around the country,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “I am proud that the Drug Enforcement Administration and our partners could stop the flow of dangerous drugs through this defendant and the sentence in this case reflects the serious threat that Mr. Galvan-Trujillo posed to all of us.”
This case was investigated DEA Tri-Cities which includes DEA, USCBP, and Kennewick PD. The Metro Drug Task Force assisted. This case was prosecuted by Assistant United States Attorney Stephanie Van Marter.
PASCO, WA – The 26th Annual Crystal Apple Awards will recognize extraordinary teachers from nine school districts on Thursday, March 7th. The award ceremony begins at 4:30 PM at the Educational Service District (ESD) 123 Professional Development Center in Pasco, Washington.
A proud tradition in southeastern Washington, the Crystal Apple Awards seek to honor the education profession as a whole by identifying just a few of the many wonderful classroom teachers in our region. During the March 7th ceremony, the following teachers will be presented with the Crystal Apple Award, along with $1,000 checks, gift certificates, and other prizes donated by generous sponsors:
This year’s winners will bring the total number of Crystal Apple recipients to 281 since the program began in 1999. The public is invited to attend the 2024 Crystal Apple Award ceremony beginning at 4:30 PM on March 7 at ESD 123 in Pasco. For more information, contact Molly Curtiss at 509.544.5787 or firstname.lastname@example.org.
The Crystal Apple Award is co-sponsored by numerous organizations, including catering provided by Sodexo. This year’s Platinum Level ($600+) Sponsors include: Bechtel National, Inc., Central Plateau Cleanup Company, CO Energy, Evergreen Associates, Gesa Credit Union, Pasco Kennewick Rotary Charitable Trust, Stevens Clay, Tri-Cities Sunrise Rotary Club, and Washington River Protection Solutions. Gold Level ($500+) Sponsors include: Community First Bank, Kiwanis Club of Pasco, STCU, and WEA Southeast.