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Two Plead Guilty|to Complex Art Fraud

DALLAS (CN) - A suburban couple pleaded guilty to a $3 million art fraud, the U.S. Attorney's Office said.

Eugenio D. Leo, 30, pleaded guilty this week to wire fraud and faces up to 5 years in federal prison and a fine of up to $250,000 or twice the loss to the victims.

His wife, Jody L. Meyer, 46, both of Allen, pleaded guilty to mail fraud and faces up to 5 years of probation and a fine of up to $250,000 or twice the loss to the victims, prosecutors said.

Allen is about 15 miles north of Dallas.

Leo worked as a commodities broker at Richardson-based Compass Financial, in 2004, prosecutors said in a statement. He devised a scheme that involved inducing two victims to invest money in short-term loans to museums in Europe. The loans were to be secured by artwork worth significantly more than the loan value. Leo asked the victims to provide power of attorney so he could make the arrangements, prosecutors said.

Instead of making the loans, however, Leo bought the art with the money, then sold it to the victims at a much higher price, never disclosing that he was the middleman. Aided and abetted by Meyer, Leo then rclaimed that he owned the art, so he could get $300,000 in loans from Art Capital Group, with the art used as collateral, according to the U.S. Attorney Office' statement. The victims were falsely told that his loan had been repaid plus interest.

Both defendants are free on bond. They are to be sentenced on June 20 by U.S. District Judge Ed Kinkeade.

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