Former General Counsel Russell Mackert of A&O Resource Management, Ltd. was sentenced to 15 years and 8 months late last month for his role in a scheme that defrauded elderly investors of $100 million.
Along with four other A&O executives, Mackert was accused of making material misrepresentations to investors, misusing investor funds, smuggling cash, and committing mail fraud.
He pled naiveté.
A&O made its money by purchasing life insurance policies from consumers at below-cost rates and then collecting benefits upon death. An investigation into the company showed that representatives touted an investment as safe, secure, and no-risk.
To back up these claims, according to the Department of Justice, A&O lied to elderly investors about the company's success, size, and protection of investment funds.
Moreover, to thwart a state investigation, Russell Mackert reportedly helped create a string of offshore shell corporations to which A&O was "bought" and "sold," though it secretly remained under control of his co-conspirators.
Mackert's attorney told the court that his services were requested by A&O executives, and that he should receive a lighter sentence because he was "naive enough and not smart enough to look behind the curtain and see the fraud," according to the Associated Press.
Not surprisingly, U.S. District Judge Robert Payne rejected this argument.
More interesting than Mackert's laughable excuse was the way in which his conviction came to a head.
The government's investigation into A&O was coordinated by President Obama's Financial Fraud Enforcement Task Force and conducted by the USPS, IRS, FBI, Texas State Securities Board, and the Virginia Corporation Commission.
Russell Mackert's downfall is the product of a new wave of inter-governmental cooperation of which scheming corporations should be afraid.
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