Charity-scam ringleader found guilty in federal court

A federal jury in Tennessee has found Richard Olive guilty of money laundering and fraud charges in a scheme involving charitable gift annuities.
A jury in the U.S. District Court for the Middle District of Tennessee on March 7 found Mr. Olive guilty of three counts of mail fraud, four counts of wire fraud and two counts of money laundering.
Mr. Olive, who has a sentencing hearing on June 17, faces 20 years in prison on each mail and wire fraud count, and up to 10 years in prison on the money-laundering charges.
Federal prosecutors in Tennessee claimed that from January 2006 through May 2007, Mr. Olive represented his phony charity group, National Foundation of America, as a legitimate 501(c)(3) nonprofit organization. During that time, he solicited elderly investors for $30 million in annuities and real estate. He told the investors that they would receive an “installment bargain contract” from National Foundation of America that would give them a guaranteed payout within a certain period and a tax deduction.
When clients turned over existing annuities to Mr. Olive’s group, he would surrender most of these contracts so the organization would obtain the funds, triggering surrender penalties, according to the indictment.
Federal prosecutors also said that the fake charity “paid its brokers commissions well above the industry rate” and that the funds were misappropriated by Mr. Olive to support an exorbitant lifestyle. For example, clients’ cash went toward payment on a $153,000 credit card bill, a family trip to New Orleans on a chartered flight, a $250,000 settlement on a lawsuit against Mr. Olive and a condo in Las Vegas worth nearly $700,000.
In the end, less than half of 1% of the $23.6 million the group received went to charity, prosecutors said.
The Federal Bureau of Investigation and the Internal Revenue Service investigated the case.
James E. Nesland, Mr. Olive’s attorney, declined to comment on the outcome.
Mr. Olive’s brush with the law in Tennessee is only the latest development in his legal history. The Securities and Exchange Commission last month filed charges against him, his wife Susan and a Tallahassee, Fla.-based organization they controlled called We the People Inc. of the United States.
The SEC claims that from June 2008 through April 2012, the group allegedly raised some $75 million from 400 elderly investors in more than 30 states using bogus charitable gift annuities.