NORTH CAROLINA
Two men were sentenced to prison for their roles in a multimillion-dollar investment fraud scheme targeting the elderly and other vulnerable victims.
U.S. District Judge Max O. Cogburn Jr. sentenced Robert Leslie Stencil, 62, of Charlotte, North Carolina, and Michael Allen Duke, 51, of Richardson, Texas.
Stencil was sentenced to 11 years and three months in prison, and was also ordered to pay $2.7 million as restitution and to forfeit $868,317. Duke was sentenced to five years and ten months in prison, and ordered to pay $1.6 million in restitution.
Following a three-week trial in January 2019, Stencil and Duke were each found guilty of one count of conspiracy to commit mail and wire fraud.
In addition, Stencil was found guilty of 13 counts of mail fraud, 13 counts of wire fraud and four counts of money laundering. Duke was found guilty of three counts of mail fraud, one count of wire fraud and one count of money laundering.
According to the evidence presented at trial, from 2012 through 2016, Stencil, Duke and their co-conspirators sold millions of dollars of worthless stock in a sham company named Niyato Industries Inc. (Niyato).
Stencil played the role of Niyato’s chief executive officer. Duke was Stencil’s top salesperson.
Together with their co-conspirators, Stencil and Duke portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas.
Stencil, Duke and their co-conspirators told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities and valuable contracts.
They also told victims that Niyato would use 97 percent of the money it raised selling stock to grow its business and expand operations.
Stencil, Duke and their co-conspirators used high-pressure tactics when pitching Niyato stock to victims, the evidence showed.
Among other things, they sold victims on the opportunity to “get in on the ground floor,” offering them a portion of a supposedly limited supply of pre-IPO stock at $.50 per share and promising them a 10- to 16-fold return when Niyato went public.
From 2012 to 2016, Stencil, Duke and their co-conspirators repeatedly told victims that an IPO was imminent, the evidence showed.
In reality, Niyato had no patents, facilities, products or plans to commence an IPO. Niyato’s true business was the sale of worthless stock.
Stencil, Duke and their co-conspirators used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Duke – half or nearly half of the money they solicited from each investor on behalf of Niyato.
Moreover, Stencil used Niyato’s bank account as his own personal piggybank, the evidence showed.
The evidence showed that, together, Stencil, Duke and their co-conspirators sold approximately $2.8 million in stock to approximately 140 victims, many of whom were elderly or vulnerable for other reasons.
Five other defendants have pleaded guilty in this matter and have already been sentenced, namely Nicholas Fleming, 64, of Northridge, California; Martin Delaine Lewis, 53, of Frisco, Texas; Paula Saccomanno, 62, of Boca Raton, Florida; Kristian F. Sierp, 48, of Costa Rica; and Dennis Swerdlen, 65, of Boca Raton, Florida.
Daniel Thomas Broyles Sr., 62, of Beverly Hills, California, was also charged and remains a fugitive.