SALT LAKE CITY, Utah (ABC4 News) – A 39-year-old Lehi man pleaded guilty to fraud schemes he created while still finishing up a federal sentence on another scam, according to the Department of Justice.
Christopher D. Hales was indicted for federal wire fraud conspiracy and money laundering conspiracy that he and man devised while Hales was in a halfway house completing a federal sentence for a 2011 bank scam.
Hales plea in the second scheme places him behind bars for 10 years.
“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer. Utahns must diligently consider investment pitches and their risks before parting with hard-earned savings,” U.S. Attorney John W. Huber said today.
The newest scheme resulted in a loss of at least $7 million to victims, documents state.
“A judge once told Christopher Hales he was addicted to defrauding people,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “The reality is that most fraudsters have no remorse or conscience, and they often re-offend. That’s why it’s so important for the public to do their due diligence when looking to invest and immediately report fraud to police or the FBI.”
Hales was convicted of mortgage fraud in 2011 and was sentenced to 7 1/2 years in federal prison and ordered to pay $12,719,236 in restitution. Hales violated the terms of his supervised release in 2016 and was given an additional 2.5 years in federal prison.
“Hales is a bad apple that has continuously fed his greed and preyed on others too many times,” said IRS-Criminal Investigation Special Agent in Charge Tara Sullivan, “IRS-Criminal Investigation is proud to work with our partners to help protect Utah residents from scammers like Hales. Please remember, if it sounds too good to be true, it probably is.”
Hales was released from federal prison on Feb. 8, 2018, and resided at a halfway house in Salt Lake City until around Aug. 8, 2018. Around Aug. 6, 2018, Nevada records show a company named Sindakit Software LLC was formed by a co-conspirator, and acquaintance of Hales, also known to federal prosecutors.
Hales told investors his name was Chris Christian, not Christopher Hales, a convicted felon on supervised release.
The indictment alleges Hales and another individual convinced investors into giving them money for a sports betting software that “beat the house.” The investors would then give him money to place sports bets.
The indictment states Hales made a variety of false statements including telling investors 100 percent of their funds would be used to place sports bets but he actually diverted nearly all their money into his and the other individual’s personal use, and to make payments to other investors.
Hales told investors he would match their funds but instead, he would take out a line of credit with the sports betting website and use the line of credit to hedge bets. Hales told investors the sports betting was producing a rate of return of around 10 percent a week which was false. Hales told investors he had potential buyers willing to purchase the software he developed for tens of millions of dollars when there were actually no buyers, documents state.
The DOJ further reported that Hales’ sports betting account statements given to investors were false and were inflated based on Hales’ line of credit and his ability to manipulate the statements. Hales was using investment money from newer investors to pay earlier investors, commonly called a Ponzi scheme.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of IRS Criminal Investigation and the FBI are conducting the investigation.
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