Just How Did "Frank Sullivan" of Plano Get 247 People To Give Him Money, Anyhow?

Categories: Crime
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This just in from the U.S. Attorney's Office: A 29-year-old man from Plano, Edward Louis Molz III, pleaded guilty in Dallas federal court this morning to a single count of wire fraud, for which he faces up 20 years in prison and a $250,000 fine. On top of that, he could have to pay back the more than 200 people he swindled in an elaborate scheme detailed in the release -- one that involved a phony name, a fake LLC, counterfeit docs and the promise of credit extended to small businesses in desperate need of "alternative financing."

The whole sordid tale follows, but very long story short: Molz -- using the name Frank Sullivan -- promised these business owners that for a small fee (say, $3,250), they could buy a so-called "aged" corporation that had a line of credit worth at least $150,000, which they were then free to spend just nine to 12 weeks after he got their money. Except it didn't quite work that way: Molz admitted to phonying up docs, then taking 247 individuals' checks and wire transfers and depositing the pile into his personal bank accounts, which he then used to buy a 2007 BMW 650, a 2005 Maserati and property on Cartwright Street in Irving.
DALLAS AREA MAN PLEADS GUILTY TO WIRE FRAUD IN CONNECTION WITH FRAUDULENT ADVANCE FEE SCHEME HE RAN

Defendant Faces Up to 20 Years in Federal Prison

DALLAS - Edward Louis Molz, III, aka "Frank Sullivan," 29, of Plano, Texas, pleaded guilty this morning before U.S. Magistrate Judge Paul D. Stickney to one count of wire fraud in connection with a fraudulent advance fee scheme he ran, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Molz faces a maximum statutory sentence of 20 years in prison, a $250,000 fine and restitution. Sentencing is set for April 18, 2011, before U.S. District Judge Sam A. Lindsay.

Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud.

According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an "aged" corporations. These "aged" corporations purportedly had access to lines of credit that were available to the purchaser.

To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of "Frank Sullivan," held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of "aged" corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a "Tier 1" corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a "Tier 2" corporation with a $250,000 minimum line of credit.

Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each "aged" corporation had additional benefits, including established "business trade lines," a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.

During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any "aged" corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.

According to the plea agreement, Molz has agreed to forfeit property that was derived from proceeds traceable to his offense, including the funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati and real estate located on Cartwright Street in Irving, Texas.

This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The FBI is in charge of the investigation; Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.

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4 comments
Montemalone
Montemalone

How is this any different from Goldman Sachs?

scott
scott

What happens when this scam is better executed is that they buy out small businesses, suggest that they will offer support and expect great things. These same people take out large loans against the business, don't hold up their end of the bargain and ruin the business. The liability goes with the business. Often these loans are guaranteed by the gov't (SBA) and only the tax payer is on the hook. Don't know that any of that is illegal, but I know of this scam second hand.

Prince Mumbutu of Nigeria
Prince Mumbutu of Nigeria

Would that we had "Darwin Awards" for small businesses. The irony here is that the victims should be glad this was a scam and not the real deal. $3000 is a small price to pay considering if this had been a legitimate offer, they could have borrowed 10 or 20 times that amount against an LC they would never have been able to pay back. Anyone who is this desperate for funds needs an honest source of financing, and may feel free to contact be directly.

Jay D
Jay D

I'll take a shot. Molz didn't contribute money to politicians who would provide cover for his illegal activities.......unlike Goldman Sachs.

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