Sunday, October 30, 2011

Timothy J. Roth Pleads Guilty in $16 Million Mail Fraud, Money Laundering Scheme


PEORIA, IL—A former Urbana, Ill., investment adviser, Timothy J. Roth, 56, currently of Stonington, Ill., appeared this morning in federal court in Peoria, where he waived indictment and pled guilty to an information charging him with engaging in a fraud scheme that resulted in victim losses of approximately $16 million. During today’s hearing, before Senior U.S. District Judge Michael M. Mihm, Roth entered guilty pleas to one count each of mail fraud and money laundering. Roth admitted that from May 2004 through March 2011, he defrauded 11 victims, including companies and individual victims, of approximately $16 million.

According to court documents and statements during today’s hearing, Roth admitted that from August 2006 to March 2011, he fraudulently transferred, liquidated, and removed mutual fund shares from clients’ accounts for his own personal and business use. Since June 2002, Roth had worked as a federally registered investment adviser for a capital management company in Champaign, Ill., and had also formed and operated several personal consulting companies. These companies provided software, and tracking and management programs various outside third party administrators for mutual fund option plans.

Over the years, clients developed a level of trust in Roth and, according to court documents, the level of authorizations extended to Roth increased. For example, standing client authorizations allowed clients to verbally authorize Roth to move funds, thereby removing the need for, and the inconvenience of, a written authorization to move funds.

The investigation, by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations Division; the U.S. Postal Inspection Service; the Securities Department of the Illinois Secretary of State; and, the Champaign Police Department, began with a telephone inquiry by an investment advisory company to the Champaign Police Department in March 2011.

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