Park's investment fraud co-defendant must pay $8.2 million restitution

Brentwood Home Page news reports
Donna Jones, former office manager of Park Capital Management Group (PCMG) and personal assistant to convicted Brentwood financial advisor Michael J. Park, was sentenced yesterday by U.S. District Court Judge Aleta Trauger to 72 months in prison.

Jones, 37, of Dickson, Tenn., was also ordered to pay $8,199,954 in restitution.

Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee, announced the sentence along with Martin P. Phanco, Inspector in Charge, United States Postal Inspection Service; Amy S. Hess, Special Agent in Charge (SAC) of the FBI’s Memphis Division; Darryl Williams, Acting SAC, IRS Criminal Investigation-Nashville Field Office; Mark Gwyn, Director, Tennessee Bureau of Investigation; and Ricky V. Watson, Chief of Police, Brentwood Police Department.

On March 10, 2010, a federal grand jury returned a 17- count indictment charging Jones with conspiracy, mail fraud, wire fraud, bank fraud and money laundering for her role in the operation of a massive Ponzi scheme that defrauded investors of more than $12,299,690. On Jan. 20, 2011, Jones pleaded guilty to charges of mail fraud and money laundering, admitting that between September 2001 and June 26, 2008, she, along with co-defendant Michael Park, operated a scheme to defraud investors who deposited funds with PCMG for investment in brokered stocks and other marketable securities.

In sentencing Jones, the Court found that she played an integral role in the execution of the Ponzi scheme and the concealment of the scheme from investors.

“Jones jeopardized the hard-earned money of individuals and egregiously abused a position of trust with investors,” Martin said. “Jones repeatedly encouraged people to invest by falsely promising security, growth and inflated returns on their money, but instead the investors lost their savings as part of an elaborate Ponzi scheme. The United States Attorney’s Office will diligently and aggressively prosecute the perpetrators of such schemes.”

At the sentencing hearing, Park, who is currently serving a 96-month sentence in federal prison for his role in the Ponzi scheme, testified that Jones maintained a spreadsheet on which she kept track of the fictitious PCMG investor accounts.  

According to Park’s testimony, none of the funds listed in PCMG investment accounts were ever invested. Park testified that he and Jones pooled the investor funds and used the funds as their own personal bank account.

Evidence produced at sentencing showed that Jones used the funds deposited in the PCMG bank accounts to pay her personal expenses, including the purchase of approximately $19,000 in clothes, home renovations costing more than $300,000, and approximately $225,000 in cash withdrawals that were deposited into defendant's personal bank account.

Park further testified that, if an investor requested a withdrawal from a PCMG investment account, Jones would cover the withdrawn amount by transferring money from funds deposited by other investors and available in the pooled PCMG account. Such withdrawal requests sometimes necessitated that Jones and/or Park solicit additional funds from new or existing investors to cover any shortfall.

In order to conceal the scheme from existing investors, and to encourage future investment in PCMG, Jones fabricated documents designed to deceive investors into believing that their funds were being actively traded and managed, and that PCMG was generating and meeting promised growth expectations.

Park also testified that, in order to falsely reinforce the point that funds invested with PCMG were safe, Jones suggested that the seal of the Securities Investor Protection Corporation (SIPC) should be placed on fictitious PCMG stock purchase confirmations and quarterly investment statements that were regularly provided to investors. In fact, PCMG was not a member of the SIPC, and the SIPC provided no protection for PCMG investors.