SANTA MONICA—On September 24, the United States Attorney’s Northern District of Illinois reported that a man and a woman have been indicted by federal prosecutors for their alleged involvement in an investment fraud scheme. The pair is accused of embezzling more than $30 million from around 70 investors in a professed voice-over-Internet telecommunications service they operated.
Canyon Country, Calif. resident Gail Howard, aka “Betty Gail Howard,” and James Jedynak, who is believed to be from the Chicago suburb of Northfield and currently a resident of Texas, each received charges of five counts of wire fraud in an indictment returned by a federal grand jury on September 23. The defendants are suspected of swindling more than $12 million worth of investors’ funds for their own personal means and may be ordered to forfeit approximately $27 million.
The charges indicate that Howard, 60, was president and chief executive officer and Jedynak, 45, was senior vice president, head of operations and sales executive of Unified Worldwide Transport, LLC (UWT), a company based in Santa Monica, Calif. that claimed to provide services in routing voice-over-Internet protocol telecommunications traffic. The company was in the business of selling equity shares to investors through private placement offerings and Jedynak was in the position of enlisting individuals and entities to invest in the business.
The terms of the indictment indicate that the suspects accumulated more than $30 million through the false offer and sale of investment interests and loans to the company between the years of 2003 and 2007. It is suspected that Howard and Jedynack misrepresented the investments and loans as a means through which telecommunications routes, the development of network infrastructure, the rendering of working capital, debt repayments and licenses and equipment purchases would be achieved. However, the pair allegedly did not keep their promise and embezzled more than $12 million to buy personal luxury items and services, including a swimming pool, a boat, jewelry, plastic surgery and home improvements. Part of the embezzled money also funded external business interests.
Another item in the alleged scam includes a misrepresentation by Howard and Jedynak where the pair stated that UWT had a contract with Peoria-based Caterpillar Corporation, a company that the defendants claimed owed money to UWT, but the indictment indicates that no contract existed and no money was owed to UWT.
It is believed that Jedynak made a fraudulent claim to investors that he would not be compensated from UWT until investors were given back all their principle. Howard, is also suspected of declaring to investors that she had a law degree and Master’s degree in business administration and was formerly a state prosecutor in Arkansas; however, the indictment indicates that herclaims were false.
The United States Attorney reports that each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. Restitution is required if the defendants are convicted.
