COLUMBUS, Ohio — An Ohio man has agreed to plead guilty to orchestrating a Ponzi scheme involving OTR tires that defrauded at least 46 investors of an estimated $50 million.
Jason E. Adkins, 40, of Jackson, Ohio, was arraigned in U.S. District Court April 8 in Columbus. According to case documents, Mr. Adkins carried out his scheme as proprietor of two companies, Landash Corp. and Midwest Coal L.L.C.
According to the plea agreement, Mr. Adkins conspired from 2012 through 2018 to solicit millions of dollars from investors under false pretenses, failed to invest the funds as promised and misappropriated investors' funds for his own benefit and the benefit of others.
Mr. Adkins and others claimed they were buying and selling large OTR tire used on earthmoving equipment and/or mining equipment. Investors were told their money would be used to buy the 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, the U.S. Attorney's Office for the Southern District of Ohio said. Mr. Adkins sometimes would pay the return on investment for the first transaction with investor victims.
"Making good on early investments perpetuated (Mr.) Adkins' scheme by appearing to corroborate his claims, which helped him attract more investors," Benjamin Glassman, U.S. Attorney for the Southern District of Ohio, said.
"What the victims didn't know was that (Mr.) Adkins was paying off early investments with the money from later ones. Although the product that Jason Adkins was purporting to buy and sell — oversize tires — was unusual, the operation of his scheme was not. It was right out of Ponzi's playbook."
For example, the office said, two specific investors were paid for their initial investment of $20,000 with Mr. Adkins in 2016, but they received only $320,000 from Mr. Adkins in return for approximately $1 million worth of investments overall.
Mr. Adkins used several methods to conceal the scope of the Ponzi scheme and to minimize associated tax liabilities, the district attorney's office said. In one case, he and others sent various amounts of investor funds through a long series of wire transfers to a number of bank accounts he had created to receive and distribute funds obtained fraudulently from investors.
Mr. Adkins also laundered his "ill-gotten" proceeds for at least five years by investing in front businesses created by co-conspirators and other methods.
He allegedly bought cars, vacations and property with the funds from the scheme. For example, he paid for the construction of a pool at his personal residence and also paid more than $20,000 to lease a private jet.
Further, Mr. Adkins failed to file individual income tax returns reporting his income derived from the scheme. In 2013 he earned at least $1.1 million, which caused a tax loss of nearly $237,000 to the Internal Revenue Service (IRS).
"A person who creates a web of financial lies will soon be caught up in it. Mr. Adkins offered rates of return of 15 to 20 percent to investors and unfortunately these were false promises," William Cheung, acting special agent in charge, IRS, Criminal Investigation, Cincinnati Field Office.
Mr. Adkins has agreed to plead guilty to three counts of wire fraud and six counts related to money laundering – all crimes punishable by up to 20 years in prison – and one count of tax evasion, which carries a maximum penalty of up to five years in prison.
Individuals who believe they may have been a victim of Mr. Adkins's scheme are urged to contact Barbara Vanarsdall, the U.S. Attorney's Office victim witness coordinator, at 614-469-5715.