The Madoff of the Ozarks didn't scam thousands of sophisticates. He didn't steal billions of dollars. Yet by defrauding innocents like the military widow who had entrusted to him the death benefit she received from her deceased soldier-husband, killed in Iraq, Lee Charles Johnson, 42, of Little Rock, has earned a special place among fraudsters.
According to the U.S. Attorney's office in Little Rock, Johnson, posing as a financial advisor, defrauded some 46 investors of $734,846. He has pleaded guilty to one count of mail fraud, which carries with it a prison term of up to 20 years and a fine of up to $250,000.
As part of his plea bargain, he agreed to make restitution to his victims, though the two widows he defrauded have yet to receive any more than $2,000 each.
"Mail fraud" hardly begins to describe the venality of Johnson's crime.
According to the U.S. Attorney's Office, he sold investments in three companies he claimed to run--despite the fact that he was not licensed to give financial advice or to sell securities.
At a hearing before Unites States District Judge D. Price Marshall, Jr., Johnson admitted he had told each victim that they would have an individual account into which their money would be placed; and that their funds, once deposited, would not be withdrawn. He promised investors a 12 to 15 percent annual return and dutifully mailed out statements reporting their non-existent profits.
All the while, says the government, Johnson was spending the money on himself. He used it to buy trips and cars, pay child support, and to pay tuition for his children's private school.
Sentence has not yet been set, and he is free on his own recognizance.
Christopher R. Thyer, U.S. Attorney for the Eastern District of Arkansas, says in reference to the widows who were victimized, "Defrauding anyone of their hard-earned money is egregious. But the fraud is especially egregious when those defrauded have lost the financial security intended for them by their loved one in death."