A former Mormon bishop was sentenced to 46 months in prison and three years supervised release for running a Ponzi scheme that defrauded members of his Trumbull congregation of nearly $500,000.
Julius C. Blackwelder, 59, was the bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints in 2005, when he persuaded members of his church to invest their money with him as part of an investment pool known as the “Friend”™s Investment Group.”
He told investors he would put their money into safe, long-term commodities futures, at times guaranteeing investors”™ principals as well as a specific return. But Blackwelder used the money to repay personal bank loans and to fund construction of his 7,000 square foot home on the Housatonic River in Stratford. He documented his misrepresentations in promissory notes and issued memoranda and account updates to investors.
Deirdre M. Daly, acting U.S. Attorney for the District of Connecticut, handled the prosecution of the case. Â “This defendant exploited his position in his church to mislead other church members into believeing he was an accomplished investor who could help them protect and increase their wealth,” Daly said. “Instead, he used much of the money he took from his victims to construct a luxurious waterfront mansion so that he could live in comfort while his victims struggled to make ends meet.”
One victim of Blackwelder”™s scheme took out a $100,000 home equity loan on his house and withdrew $130,000 from his 401(k) to invest with the former religious leader, according to Daly.
Blackwelder was arrested after an investigation conducted by the U.S. Postal Inspection Service, the Special Inspector General for the Troubled Asset Relief Program, the IRS and the state Department of Banking.
Blackwelder pleaded guilty to one count of wire fraud and one count of money laundering on Feb. 20. He was sentenced June 27 in U.S. District Court in New Haven by Judge Ellen Bree Burns.
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