Court Of Appeals Overturns Ponzi Schemer's State Sentence, Restitution

By Mike Perleberg Jerry Smith's state sentence and restitution in Franklin County have been overturned by the Indiana Court of Appeals. Photo by Dearborn County Sheriff's Department. (Indianapolis, Ind.) - The Indiana Court of Appeals is overturning the state sentence and restitution order of a Brookville man who was a co-conspirator in a multi-million dollar investment scheme. Jerry Smith, now 52, and Jasen Snelling used a Ponzi scheme to bilk investors in Indiana, Ohio, and Kentucky out of nearly $9 million starting in 2004 up until they were busted in 2012. Some victims were Smith’s own family and friends in Indiana. After pleading guilty to federal charges in U.S. District Court in Ohio in 2013, Smith filed a motion to dismiss state charges against him in Franklin County. He contended that the State’s prosecution was double jeopardy, being tried twice for the same crime. The Franklin Circuit Court judge dismissed 15 counts of securities fraud. However, the trial court denied Smith’s motion to dismiss 10 other counts relating to Smith’s unlawful selling of securities and failing to register as a broker-dealer Smith appealed to have the remaining 10 counts dismissed. The Court of Appeals followed with a ruling to dismiss the five counts related to the unlawful securities selling, but allowed that Smith could still be prosecuted in Franklin County for not registering as a broker-dealer. Eventually, Smith pleaded guilty in Franklin County to those five standing counts in December 2014. He was sentenced to 40 years – eight years on each of the five count convictions – with 20 years suspended to probation. He was also ordered to pay about $410,000 in restitution to the Indiana victims. Once convicted by the state, Smith appealed once again in January to question the state restitution order and the length of his sentence. On Tuesday, the State Court of Appeals issued a 3-0 opinion in Smith’s favor. The appellate judges ruled that the Franklin County prosecutors failed to analyze the opinion from an earlier appeal by Smith. “We observed that the federal court’s judgment ordered Smith to pay restitution of $5 million, which specifically included restitution to the Indiana victims named in the state charges,” Indiana Court of Appeals Judge Michael P. Barnes wrote in the 13-page opinion. Regarding the length of Smith’s sentence, the appellate court reasoned that Smith’s failure to register as a broker was one single episode of criminal conduct, not five, and should be sentenced accordingly. “The precise number of times that Smith transacted business is not the gravamen of the offense; rather, it is his initial failure to register. That failure is a grievance against the Secretary of State and the State as a whole, which by itself did not result in direct harm to the victims,” Barnes wrote. The Court of Appeals remanded the case without allowing for Smith to be retried. The appellate court will allow the Franklin County judge to sentence Smith again, but only up to 10 years and without any order to pay restitution. The 2013 federal court order requiring Smith to pay his $5.4 million portion of the restitution to victims in all three states and serve 5 ½ years in prison remains in place. He is still serving a concurrent eight year sentence – five years in prison and three on probation – for a conviction in Dearborn County this past June. Smith was in Dearborn Superior Court I on Tuesday, June 9 to learn his third sentence. Special Judge Ted R. Todd from Jefferson County ordered Smith to serve eight years – five years in prison and three years on probation. He was given credit for 666 days served before his sentencing. According to The Indiana Lawyer, Indianapolis-based OneAmerica Securities Inc. subsequently agreed to pay Indiana $805,000 to settle allegations it failed to supervise Smith when he served as a “registered representative” from 2005 to 2008. OneAmerica Securities did not admit to any liability in the agreement with the Indiana Securities Division. The agreement, filed Oct. 17, 2014, said OneAmerica agreed to the settlement “to avoid the expense and uncertainty of litigation and the potential impairment of its goodwill.” Snelling, of Cincinnati, is serving a 131 month federal prison sentence and an eight year sentence out of Dearborn County for his role in the Ponzi scheme. He has been ordered in federal court to repay $5.3 million in restitution. RELATED STORIES: Ponzi Scheme Partner Receives 8 More Years In Dearborn Co. 40 Year Sentence For Franklin Co. Ponzi Scheme Partner Franklin Co. Ponzi Scheme Partner Pleads To Local Charges Ind. Supreme Court Denies Appeal Of Ponzi Scheme Case Scammer Sentenced To Prison, Must Pay Back Convicted Ponzi Schemer Gets 40 More Years Tri-State Ponzi Schemer Gets 131 Mos. In Prison Another Guilty Plea In Tri-State Ponzi Scheme Securities Scammer Getting 8 Yrs In Dearborn Co.