Gilbert, AZ Resident, Gerald Lee Kelly, Indicted for Using Cornerstone
Financial Holdings to Bilk Distressed Homeowners
A federal grand jury indicted Gilbert, Arizona resident Gerald Lee Kelly
on Wednesday for his alleged role in what prosecutors are calling a “significant
financial fraud directed against distressed homeowners.”
According to the indictment, Kelly used his business, Cornerstone Financial
Holdings, LLC, to defraud at least eight investors out of approximately $855,000.
Kelly allegedly told investors that their money would be used to fund short-term,
high-interest loans to distressed homeowners. He also allegedly claimed
that the investments were secured by promissory notes and various interests
in homeowner properties.
The indictment alleges that Kelly knowingly misled investors with these
claims. According to the indictment, the
promissory notes and homeowner properties were inadequate to protect the investors from
loss. Kelly allegedly knew this. The indictment also accuses him of misleading
investors about the financial state of his company, and of misappropriating
investor funds for his personal use.
Kelly has been charged with four counts of wire fraud, six counts of mail
fraud, 10 counts of money laundering, and five counts of structuring financial
transactions to avoid federal bank reporting requirements. If convicted,
he could face up to 20 years in prison for each count of wire fraud and
mail fraud, up to 10 years for each count of money laundering, and up
to five years for each count of structuring financial transactions to
avoid federal bank reporting requirements. His arraignment is scheduled
for Jan. 25. For more information,
read the government press release.