(CN) – An unlicensed securities dealer pleaded guilty to scamming people for $735,000 – including a widow who invested all her survivor benefits after her husband was killed in Iraq, federal prosecutors said.
Lee Charles Johnson, 42, of Little Rock, Ark., pleaded guilty to mail fraud in a one-count felony information, the U.S. Attorney’s Office there said.
Johnson, who was not licensed to sell securities or act as a financial adviser, sold “securities and investment opportunities” in three companies he “purported to run:” TJC Group, Johnson Food Group and Keystone Hybrid Fund, according to the U.S. attorney.
Johnson promised 12 to 15 percent annual return on inveetments, then spent the money on himself, for cars and trips, for child support payments, tuition for his children’s private schools and “tens of thousands of dollars in cash withdrawals,” prosecutors said in the statement.
He sold securities to 46 people or couples, prosecutors said: “The loss to date is $734,846.38.”
Prosecutors’ statement continued: “One of the victims invested all of the military survivor benefits she received after her husband was killed in Fallujah. Another victim invested all of the life insurance benefits she received after her husband died.”
Johnson faces up to 20 years in federal prison and a fine of up to $250,000. He is free pending sentencing, which has yet to be scheduled.