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HARRIS DEMPSEY “BUTCH” BALLOW AND NINE OTHERS CHARGED WITH ALLEGEDLY EXECUTING STOCK FRAUD SCHEME WHILE BALLOW A FUGITIVE FROM JUSTICE
Co-defendants charged with harboring and concealing Ballow from arrest
http://www.justice.gov/usao/txs/releases/November%202010/110210%20Ballow.htm
(HOUSTON) – A federal grand jury returned two separate but related indictments Oct. 26, 2010, against Harris Dempsey “Butch” Ballow, 67, formerly of Galveston County, Texas, and a total of nine other alleged associates arising from an alleged fraudulent stock sale scheme executed while Ballow was a fugitive from justice as well as charges arising from harboring and hindering Ballow’s arrest and assisting an offender, United States Attorney José Angel Moreno announced today along with FBI Special Agent in Charge Richard C. Powers and acting United States Marshal Elizabeth Saenz.
The first indictment (H-10-494-S) alleges a total of eight counts. Ballow; his wife, Robin Harless Ballow, 56, formerly of Galveston County, Texas; Ruben Garza Perez, 50, formerly of Houston; Kelly Lyn Boothe, 44, of Houston; and Jeffrey Janssen Anuth, 52, of Cancun, Mexico, are charged with conspiracy to commit wire fraud arising from an alleged seven-year scheme during which the defendants allegedly sold shares of stock in public companies acquired and controlled by Ballow while he was a fugitive from justice. According to allegations in the indictment, the defendants sold stock to unsuspecting investors by hiding Ballow’s true identity, disseminating false and misleading information to increase and maintain the value of stock, failing to fulfill promises to remove restrictions which prevented investors from selling the stock and selling land and ownership interests in a real estate development that never materialized.
Harris Ballow was a fugitive from justice in the United States for more than five years. He was indicted in federal court in Houston in 2003 for fraud and money laundering which centered on misrepresentations made in connection with the purchase and sale of stock. Ballow pleaded guilty before U.S. District Judge David Hittner to money laundering in November 2003 and faced a maximum of 10 years imprisonment. At the time, Ballow, who had been in custody without bond for approximately a year, agreed to cooperate with a Securities and Exchange Commission (SEC) investigation and was released on a $100,000 bond pending his sentencing set for Dec. 16, 2004. However, Ballow failed to appear for the sentencing and fled the country. A warrant for Ballow's arrest was issued the next day, Dec. 17, 2004.
According to today’s superseding indictment, Harris Ballow lived under the names John Gel, Tom Brown and Marty Twinley during his time as a fugitive and also acquired a British passport in the name of Melvyn John Gelsthorpe. The indictment alleges he used these names to take control of publicly-traded corporations, including E-SOL International Corp., Medra Corp., Deep Earth Resources Inc. and Aztec Technology Partners Inc., now called Ultimate Lifestyles Corporation, and sold the stock to investors without revealing his true identity, his use of multiple names, his past convictions for fraud and money laundering and his status as fugitive from justice in the United States. Harris Ballow and the other four defendants are also charged with four counts of wire fraud arising from the alleged scheme.
Harris Ballow is also charged with failure to appear at a sentencing hearing in federal court in 2004. All other defendants are charged with harboring and concealing him from arrest and with assisting a federal offender.
According to the indictment, Robin Ballow, who also lived under alias names, accompanied her husband the entire time that he was a fugitive, concealing his true identity from investors and law enforcement authorities.
Perez was a long-time associate of Harris Ballow. According to the indictment, after Ballow fled the United States, Perez followed him around Central America and Mexico and managed many of his financial affairs.
Anuth became an officer of two companies controlled by Harris Ballow around 2007. Anuth was allegedly informed that Ballow was wanted by the FBI in 2008 but continued to work for Ballow for approximately two more years, allegedly hiding Ballow’s true name from investors. Boothe became the president of a Ballow-controlled company in 2005. According to the indictment, Boothe associated with Ballow while he lived under multiple alias names for the subsequent five years until Ballow was arrested in 2010.
The indictment alleges Ballow moved to Puerto Aventuras, Mexico, in 2008, but disappeared in July 2009, just days after convincing an investor to wire transfer $5 million to E-SOL. According to the indictment, in October 2009, Ballow reappeared in Puerto Vallarta, Mexico, where he lived in a luxurious golf resort until he was arrested by Mexican federal police on July 13, 2010. He awaits extradition to the United States. Warrants remain outstanding for the arrest of Ballow’s wife, Perez, Anuth and Boothe.
The second separate but related indictment (H-10-258-S), alleging a total of nine counts, charges Patrick Lanier, 62, of Austin, Texas; Christopher Robert Harless, 57, of Georgetown, Texas; Sikiru Olubunmi “Tony” Bonojo, 40, of Missouri City, Texas; Clarence LaFey Hudgens Jr., 54, of Lebanon, Ore.; and James David Wright, 55, of Corinth, Texas, with conspiracy to commit wire fraud arising from the same alleged stock sale scheme alleged in the first indictment, four counts of wire fraud as well as one count of harboring and concealing Ballow from arrest. Hudgens and Wright are each charged separately with one additional count of making false statements to the U.S. Marshals Service during the search for Harris Ballow in 2009. The indictment had been returned under seal but was unsealed following the surrender and/or arrest of the defendants.
Lanier is an Austin, Texas, attorney who represented Harris Ballow during proceedings before the SEC in 2004 and also during the criminal case that led to Ballow becoming a fugitive. The indictment alleges that Lanier served as a lawyer for a corporation that Ballow controlled after Ballow fled the United States. He surrendered to federal authorities in Austin, Texas, this morning and has made an initial appearance before a U.S. Magistrate there.
Harless was Robin Ballow’s brother and, thus, Harris Ballow’s brother-in-law. The indictment alleges Harless moved to Mexico in 2008 where he lived under an alias name and worked for Harris Ballow. Harless was arrested in Georgetown, Texas, and made his initial appearance today before a U.S. Magistrate Judge in Austin. Harless has been ordered temporarily detained pending a detention hearing scheduled for Friday, Nov. 5, 2010.
Bonojo met Harris Dempsey Ballow in prison. According to the indictment, Bonojo received hundreds of thousands of dollars from Ballow while he was a fugitive and distributed portions of it, in cash, to Ballow’s relatives in Texas. Bonojo was arrested in Houston on Friday, Oct. 29, 2010, and appeared before U.S. Magistrate Judge Stephen Smith on Monday, Nov. 1, 2010. He has been ordered temporarily detained pending a detention hearing scheduled for Thursday, Nov. 4, 2010.
Hudgens Jr. began working with Harris Ballow in or around 2007, according to the indictment. Later, he too became the president of a Ballow-controlled company. The indictment alleges that an FBI agent and Deputy U.S. Marshal informed Hudgens in 2009 that Harris Ballow was a fugitive, but that Hudgens thereafter continued to work for Ballow and allegedly deceived investors into believing that Ballow’s name was Tom Brown.
Wright was a friend of Harris Ballow for many years, according to the indictment, and became the CEO of a Ballow-controlled company in 2009. The indictment alleges that Wright was confronted by Deputy U.S. Marshals in 2009 in Mexico and falsely claimed not to know Ballow.
Hudgens and Wright, who were charged in the original indictment, are presently on bond. They are expected to make initial appearances on the new charges in the near future in response to a summons.
The conspiracy to commit wire fraud and substantive wire fraud charges each carry a maximum statutory penalty of 20 years imprisonment and a fine of not more than $250,000. The harboring and false statement charges each carry a maximum statutory penalty of five years imprisonment and a fine of not more than $250,000. Assisting a federal offender charges carry a maximum statutory penalty of two and one-half years imprisonment and a fine of not more than $250,000.
The case was jointly investigated by the United States Marshals Service and the FBI with the substantial assistance of the United States Postal Inspection Service. Assistant U.S. Attorney John R. Lewis will be prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.
http://www.justice.gov/usao/txs/releases/November%202010/110210%20Ballow.htm
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