Published: December 18, 2008 11:04 am      

Owens draws 63-month federal prison term

Mineral Wells man not expected to live two more years because of failing health.

By David May
editor@mineralwellsindex.com

DALLAS — Mineral Wells resident Ronald Keith Owens, 72, was sentenced Wednesday to just over five years in federal prison for defrauding investors out of some $2.6 million dollars.

He is not expected to leave prison alive.

Medical testimony was reportedly given in court that Owens, who suffers from Leukemia and liver failure requiring regular dialysis treatment, has no more than two years to live. Owens pleaded guilty in August to charges related to an investment scheme.

Benny King, of Mobile, Ala., one of Owens’ victims who testified during Wednesday’s sentencing hearing, said while it appears none of the victims will ever see a dime of restitution, he told the Index he was satisfied with the court’s punishment.

“I’m very satisfied with the sentence he got,” said King. “It’s effectively a life sentence. He’ll never get out alive.”

King said presiding U.S. District Judge Barbara M.G. Lynn told Owens to enjoy this Christmas with his family because it will likely be the last one he spends with them.

Lynn sentenced Owens to 63 months in federal prison and to pay $2.58 million in restitution to the hundreds of victims identified as investors who lost money in what authorities described as a “Ponzi scheme.”

The judge also ordered Owens to pay the Internal Revenue Service $550,304 in back taxes. However, King said Owens’ attorneys told the court they settled the IRS claim on Tuesday. The judge reportedly told the attorneys she had no record or knowledge of any agreement with the IRS.

King said it was revealed in court that Owens and his wife, Ruth, had moved out of their posh home on Bluff Circle and were now living in an apartment in Mineral Wells. Palo Pinto County last month filed for back property taxes on the home in an amount over $4,000.

Owens was ordered to report to the Bureau of Prisons by Jan. 29 to begin serving his sentence.

Owens will now face sentencing in the 29th State District Court on state charge of first-degree felony theft over $200,000. He pleaded guilty to that charge before District Judge Jerry Ray in August.

King said no other family members of Owens were in the courtroom. The judge heard and received testimony on behalf of Owens from character witnesses. King said he and his brother, Jerry, testified. Another victim, Shirley Stevens, of Dallas, was in the courtroom but opted not to address the court or Owens.

“I accused him of being a financial terrorist,” Benny King said. “He can never make up for the many sleepless nights he has caused everyone else.”

King added that Owens made an apology to the victims in court, but said the judge told him that his words “did not ring very true” to her.

King said the judge told Owens he was “like two different people, like a non-diagnosed schizophrenic.”

“The system works,” added King, who previously told the Index he lost about $175,000. “As far as I’m concerned, the case is closed and I’m moving on with my life.”

Owens’ investment scheme began in 2000, according to prosecutors.

“Mr. Owens’ scheme was particularly insidious as it financially devastated many elderly victims,” stated Fort Worth Division Postal Inspector in Charge Randall C. Till in a written press release. “Postal inspectors will continue the fight against crooks that use the U.S. mail to fleece the honest, hard-working citizens of America.”

Owens operated an investment business in Mineral Wells known as Executive Investors, Inc. (EII), which was also known as Newlife Trade Group (NTG). Through those companies and individually, Owens solicited money from individuals throughout the U.S. to invest in offshore “bank credit instrument trading,” supposedly located in Nassau, Bahamas, Germany and Switzerland.

These investments, however, did not exist, officials say.

Owens pleaded guilty in August to one federal count of wire fraud and one count of filing a false tax return. Owens ran his scheme from approximately March 2000 through September 2007. As part of the scheme, he created promotional literature for buying and selling bank credit instruments that fraudulently reflected high investment returns, such as a 30 percent monthly return, with 10 percent of the return paid each month with the remaining 20 percent added to the principal investment and compounded. He also promoted investments in the offshore programs through group leaders who recruited investors and formed joint ventures to make investments.

Owens caused his investors to send funds by wire transfer, and checks mailed to Mineral Wells, “knowing the funds would not be invested as represented to investors. He used the investor funds as ‘Ponzi’ payments to early investors and for personal use,” according to a press release issued by the U.S. Attorney’s office.

Prosecutors say Owens then provided investor account information to a company in Florida, knowing the information was false and would be used to create and mail false account statements to investors. He reportedly required investors to sign settlement and release agreements regarding their fund balances, knowing the information in the agreements was false.

To keep the scheme going, Owens reportedly created and sent more than 200 “lulling e-mails” to investors about his supposed efforts to liquidate investments in foreign bank credit instruments and return principle and interest amounts to investors, knowing the e-mails contained false information.

In 2004 and 2005, Owens requested additional funds from investors to offset expenses incurred during his supposed retrieval of investment money from these foreign banks, knowing the requests contained false information. He continued representing to investors, through September 2007, that their funds were being deposited with the foreign banks, well knowing that the funds had been depleted in 2003, for purposes other than what he had represented to investors.

As a result of Owens’ scheme, investors lost a total $2,582,376.79, according to officials.

Owens also admitted he filed a false income tax return in 2003, reporting that he had $107,877 of gross income in 2002 when in fact he had approximately $1,142,322.

“Investors must be vigilant with their hard earned money and remember that scam artists exist in every walk of life. Ponzi schemes are just another form of theft and we should protect ourselves by being cautious and recognizing that if something sounds too good to be true, it probably is,” said Michael P. Lahey, Special Agent in Charge, IRS-Criminal Investigation, Dallas Field Office.

U.S. Attorney Richard B. Roper of the Northern District of Texas praised the investigative efforts of the FBI, the Internal Revenue Service - Criminal Investigation and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Jay Weimer.