February 20, 2024
New defendants charged in  million Ponzi scheme involving off-the-road tires
New defendants charged in  million Ponzi scheme involving off-the-road tiresCOLUMBUS, Ohio– A federal grand jury has indicted two Texas men for their roles in...

COLUMBUS, Ohio– A federal grand jury has indicted two Texas men for their roles in one or more alleged conspiracies involving wire fraud, money laundering and tax fraud.

 

Charges pending against John K. Eckerd, Jr., 58, of Dallas, and Afif Baltagi, 45, of Houston, were unsealed yesterday.

 

It is alleged that Eckerd is the leader of the multi-state conspiracy.

 

Conspiring with previously convicted and sentenced defendant Jason E. Adkins, 46, of Jackson, Ohio, Eckerd, Baltagi, and others orchestrated a $50 million Ponzi scheme that defrauded more than 50 investors.

 

According to the indictment, from 2012 until at least in or around late 2018, Eckerd represented himself to potential investors as an entrepreneur and businessman with expertise in the market for off-the-road tires. Off-the-road tires are over-sized tires that are used on earth moving equipment and/or mining equipment. Eckerd had control of or access to many corporations allegedly used as part of the scheme.

 

Baltagi worked in logistics for a freight company that had access to a storage yard in Houston where off-the-road tires were stored.

 

Co-conspirators allegedly solicited millions of dollars from investor-victims under false pretenses. Investors were told their money would be used to buy off-the-road tires at a steep discount, and that the tires would then be re-sold to a buyer at a much higher rate. Investors were promised a 15 to 20 percent rate of return on investment, generally within 180 days.

 

Eckerd, Baltagi, Adkins, and others corresponded with the potential investors face-to-face, as well as through a combination of phone calls, text messages, and, on occasion, emails. It is alleged they used private planes to showcase their inventory and appear wealthy and successful. Defendants also allegedly provided investors with elaborate, fraudulent paperwork regarding the purported deals. The co-conspirators requested large investments and loans, most to be funded through wire transfers.

 

It is alleged defendants rarely bought or sold tires, and when they did, they used the same tires as the basis for multiple deals, promising multiple investors that they each owned the same tires. Baltagi allegedly used his employer’s tire yard to deceive investors.

 

Another previously convicted defendant, Todd Wilkin, 60, of Hillsboro, Ohio, posed as a neutral third-party seller of off-the-road tires in deals arranged by Adkins. In actuality, Wilkin was working with Adkins as part of the Ponzi scheme. Wilkin pleaded guilty in January 2022 to participating in the fraud scheme and awaits sentencing.

 

Eckerd, Adkins and others allegedly conspired to launder the proceeds from their Ponzi scheme by creating numerous corporate entities and associated bank accounts. It is alleged that Eckerd had control of many of the business accounts but that he instructed others to place the accounts in other people’s names.

 

Eckerd also allegedly lied on his tax forms and conspired with others to avoid paying taxes he owed, resulting in a tax loss of more than $1 million for tax years 2013 and 2014. Eckerd failed to file his taxes for tax years 2016 and 2017. In July 2018, Eckerd filed for bankruptcy on the same day he allegedly transferred $1 million between two bank accounts in his control. Over the next month, it is alleged Eckerd transferred another $715,000 between accounts in his control.

 

Conspiracy to commit wire fraud is a federal crime punishable by up to 20 years in prison. Conspiracy to commit money laundering carries a potential maximum penalty of 20 years in prison. Conspiracy to defraud the United States and to commit tax fraud is a federal crime punishable by up to five years in prison.

 

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Bryant Jackson, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation; and J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the case. Assistant United States Attorneys S. Courter Shimeall, Peter K. Glenn-Applegate and David J. Twombly are representing the United States in this case.

 

An indictment merely contains allegations, and defendants are presumed innocent unless proven guilty in a court of law.

 

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Originally published at https://www.fbi.gov/contact-us/field-offices/cincinnati/news/new-defendants-charged-in-50-million-ponzi-scheme-involving-off-the-road-tires

originally published at HUMAN RIGHTS - USA DAILY NEWS 24