US fraudster who used Cayman company sentenced to 262 months

A US fraudster, who used a Cayman Islands bank account and employed nominee directors for his offshore entities in Cayman, the British Virgin Islands and Nevis to conceal his income, has been sentenced to 262 months in prison for wire fraud and 60 months’ imprisonment for tax evasion.

The sentences will run concurrently.

Treyton Thomas, 62, a resident of Naples, Florida, was charged in November 2016 in a 21-count indictment with wire fraud, bank fraud and tax evasion. In October 2018, he pled guilty to wire fraud, affecting a financial institution and income tax evasion.

Thomas purported to be a successful Harvard-educated investment adviser for Cayman-incorporated Marbury Advisors. He was charged with defrauding his father’s used car warranty company, several of its customers, his wife, and his father-in-law.

Thomas claimed he was conservatively investing their money in US Treasury Bills, when instead he lost about US$4.5 million in risky trades in the commodities and futures market. To cover up the losses, Thomas provided the victims and various financial institutions with false information and fabricated bank and brokerage statements. He used the same falsified records to defraud US financial institutions out of approximately US$1.9 million in loans.

In addition to losing the victims’ money in risky trades, Thomas was charged with spending more than US$1.6 million of their funds for personal expenses.

Thomas hid his income from the Internal Revenue Service by concealing his interest in foreign corporations and using offshore bank accounts to pay for personal expenses, the Department of Justice said.

The Eastern District Court of North Carolina ordered Thomas to pay approximately US$7.3 million in restitution to the victims of the investment and bank fraud schemes, the Internal Revenue Service and the United States Attorney’s Office and to forfeit an additional US$7.3 million to the United States.

Thomas who was charged with tax evasion in a second indictment in 2018, failed to file income tax returns or pay taxes for two decades, according to court records.

Nominee directors opened and managed bank accounts, which Thomas used to move client funds in and out of the US. In addition, he created fake or ‘ghost’ employees to make it appear that he operated a large, successful investment fund. To conceal his own identity, Thomas used aliases or variations of his given name.