THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, November 29, 1995 TAG: 9511290405
SECTION: LOCAL PAGE: B2 EDITION: FINAL
SOURCE: STAFF REPORT
DATELINE: NORFOLK LENGTH: Short : 43 lines
A former Newport News man pleaded guilty in federal court Wednesday to bilking 19 people of more than three quarters of a million dollars in a fraudulent investment scheme.
Robert E. Hutchinson, 49, solicited more than $797,224 from investors between 1988 to 1992. In some cases, investors withdrew money from legitimate investments.
Under an illegal Ponzi scheme, Hutchinson used the proceeds from later investors to repay interest and partial principal payments to initial investors, who believed their investments were paying off.
Hutchinson promised investors their money would be used for construction projects and real estate loans. Instead, Hutchinson used the funds for his personal gain.
Hutchinson operated his investment company, R.E. Hutchinson & Associates, LTD, in Williamsburg. He promised investors rates of 3 to 4 percent above market rates for investing in Private Guaranteed Offering, which allegedly was funding construction of a hotel in Alaska. About 12 Peninsula investors bought into the scheme, investing about $680,224.
To finance the scheme, Hutchinson deposited a check for $1.2 million at Crestar Bank, then paid off investors, paid business expenses or kept $596,388 before the check bounced.
In a secondary scheme, known as Millenium 2000, Hutchinson sold investments in a stock trading program which resulted in $117,000 in investments that he used for business and personal expenses. The total amount of solicited investments in the two schemes was $797,224.41.
Specifically, Hutchinson was charged with federal wire fraud because he wired $21,400 transferred in interstate commerce from Newport News to Littleton, Colo. He could receive a maximum of 30 years in prison and a fine of $1 million, said U.S. Attorney Robert J. Krask.
KEYWORDS: ARREST FRAUD FLIM FLAM by CNB