Sheffield Man Sentenced to 18 Months in Prison for Scheme Involving ATVs |
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U.S. Attorney’s Office, Northern District of Ohio
February 22, 2013
Nicholas J. Henry, age 29, of Sheffield, Ohio, was sentenced today to 18 months in prison and ordered to pay restitution in the amount of $220,532.64 as a result of his recent conviction for wire fraud, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Henry was also ordered to serve a three-year period of supervised release following his release from prison and was ordered to pay a $100 special assessment to the Crime Victims’ Fund.
On May 22, 2012, a federal grand jury in Cleveland, Ohio, returned an indictment which charged that from on or about January 1, 2005 through on or about October 15, 2009, Henry knowingly devised a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses, representations, and promises, and that in executing said scheme and artifice, he knowingly caused funds to be transmitted from the victims to Henry by means of interstate wire communications. Henry entered a guilty plea to wire fraud on October 23, 2012.
Henry advertised the sale of certain all terrain vehicles (ATVs) and scooters via an Internet website and used the business names “China Vehicle Company LTD” and “Scooter Direct.” China Vehicle Company LTD. and Scooter Direct were not incorporated entities with the Ohio Secretary of State’s Office and were not registered as limited liability companies in Ohio. Henry targeted his solicitations primarily towards automobile dealerships throughout the United States, offering to sell vehicles such as ATVs and scooters manufactured in China at a “discounted” price, for resale to the public, according to court documents.
Henry directed the customers to make full or partial payments for the ATVs and scooters by sending wire transfers of funds to his personal bank accounts. Henry would immediately take his full commission upon receiving payment from the automobile dealerships and prior to receiving the shipment of ATVs and scooters from China, according to court documents.
Despite receiving payment and taking his commission for the transactions, Henry failed to provide ATVs and scooters to the automobile dealerships as agreed. Instead, Henry made repeated excuses to some dealerships for his failure to deliver the merchandise as agreed and eventually failed to respond to inquiries and complaints from the customers. Despite his inability to deliver ATVs and scooters to the dealerships as promised, Henry nonetheless continued advertising, soliciting additional sales, and entering into sales contracts with additional dealerships throughout the period covered in the indictment.
Between January 1, 2005 and October 15, 2009, Henry received at least 36 wire transfers of funds from the dealerships as payment for ATVs and scooters, which Henry negotiated on behalf of the China Vehicle Company LTD., totaling over $266,000. Henry failed to refund or return payments received for merchandise not delivered to the victim dealerships but rather took a 20-25 percent commission immediately upon receipt of the payments. Henry later withdrew, spent, and converted to his own use the funds from the wire transfers initiated by the dealerships totaling over $143,000, according to court documents.
Between September 25, 2008 and October 15, 2009, Henry received wire transfers for “new” orders from victim dealerships totaling approximately $79,644. During this time, Henry made no attempt to secure scooters from China and made no payments to the manufacturer. Instead, Henry used the funds received from the victims to pay personal bills and expenses including rent, car payments, utilities and other personal expenses, according to court documents.
This case was prosecuted by Assistant United States Attorneys Carol M. Skutnik and Robert W. Kern. The case was investigated by the Elyria Office of the Federal Bureau of Investigation.