You are on page 1of 8

Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 1 of 8 - Page ID#: 1

laetml D1Striot of EentUGIY


UNITED STATES DISTRICT COURT
FIL ID
EASTERN DISTRICT OF KENTUCKY MAY - 4 2017
CENTRAL DIVISION
AT LEXINGTON
LEXINGTON ROBERT R. CMR
CLERK U.S. DISTRICT COURT
UNITED STATES OF AMERICA

v. INDICTMENT NO. 5 11- CQ- fc-. 2 - J /..1 I+

LEON A. SMITH

* * * * *
THE UNITED STATES ATTORNEY CHARGES:

BACKGROUND

During the period relevant to this Indictment:

1. LEON SMITH offered a variety of services to professional athletes

through various businesses he owned and operated, including Legacy Pro Management

Group, LLC; LSMG, LLC; and Legacy Athlete Management, LLC (hereinafter,

collectively, "Legacy"). Under the Legacy name, SMITH agreed to provide services to

numerous professional athletes (hereinafter, collectively, "Legacy clients"), including

assistance with relocation, real estate purchases or rentals, other major purchases, bill

payment, and referral to other professionals for legal needs and financial planning.

SMITH and each Legacy client agreed that SMITH would receive periodic

compensation for his services, which generally was a percentage of the Legacy client's

eammgs.
Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 2 of 8 - Page ID#: 2

2. Each Legacy client relevant to this Indictment authorized SMITH to

conduct financial transactions on his or her behalf and therefore entrusted SMITH with

his or her financial account data, dates of birth, social security numbers, and other

personal and financial data. In each instance, the Legacy client gave SMITH this

information and these responsibilities solely to enable SMITH to conduct authorized

financial transactions on the client's behalf.

3. In some circumstances, Legacy clients directed that their payroll checks,

federal income tax refund checks, and other payments be sent directly to SMITH. Each

of these Legacy clients entrusted SMITH with these payments to enable SMITH to

deposit them in the client's accounts and use the proceeds to conduct financial

transactions on the client's behalf.

COUNTSl-4
18 u.s.c. 1343

4. The Background section of this Indictment is realleged and incorporated by

reference as if set forth fully herein.

5. On or about a date in September 2011, and continuing through on or about

January 29, 2015, in Fayette County, in the Eastern District of Kentucky, and elsewhere,

LEON A. SMITH

devised and intended to devise a scheme to defraud and to obtain money and property

from Legacy clients by means of materially false and fraudulent pretenses.

MANNER AND MEANS

The manner and means used to accomplish the objectives of the scheme included,
Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 3 of 8 - Page ID#: 3

among others, the following:

6. SMITH abused his access to Legacy clients' financial accounts to use the

clients' funds for unauthorized purposes.

7. SMITH received payments that had been issued to Legacy clients,

including payroll checks and federal income tax refund checks, deposited those items into

accounts opened in the name of Legacy, and used the funds for unauthorized purposes.

8. SMITH used the personal and financial data of Legacy clients to open

unauthorized financial accounts in their names, including credit card accounts and lines

of credit. SMITH then used these accounts for unauthorized purchases.

9. SMITH concealed his unauthorized transactions by changing passwords to

financial accounts belonging to Legacy clients, restricting access to the new passwords,

and fabricating expense reports that used fictitious expenses to explain low balances in

the financial accounts.

10. Over the course of this scheme, between a date in September 2011 and

approximately January 29, 2015, SMITH misappropriated over $1,298,506.82 in funds

belonging to Legacy clients.

EXECUTION OF THE SCHEME

11. On or about the dates listed below, in Fayette County, in the Eastern

District of Kentucky, and elsewhere,


Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 4 of 8 - Page ID#: 4

LEON SMITH,

for the purpose of executing the scheme described above, and in order to effect the

objects thereof, knowingly caused to be transmitted by means of wire communication in

interstate commerce the items listed below:

Count Date and Description


1 September 12, 2012 wire transfer of $14,000.00 from Raymond James
account ****8634, opened in the name of J.L., to Central Bank account
****6146, opened in the name of LSMG, LLC
2 January 28, 2013 deposit of royalty check number 5383 from the
National Basketball Players Association, made payable to J.D.H. for
$40,000.00, to Central Bank account ****6146, opened in the name of
LSMG,LLC
3 September 4, 2013 wire transfer of $3,450.00 from Raymond James
account ********1668, opened in the name of J.D.H., to Central Bank
account ****6146, opened in the name ofLSMG, LLC
4 September 18, 2013 wire transfer of $2,467.74 from Raymond James
account ********1438, opened in the name of a limited liability
company associated with D.M., to Central Bank account ****6146,
opened in the name of LSMG, LLC

Each in violation of 18 U.S.C. 1343.

COUNTSS-13
18 U.S.C. 1028A

12. The allegations contained in Paragraphs 1 through 11 of this Indictment are

realleged and incorporated by reference as if set forth fully herein.

13. On or about the dates listed below, in Fayette County, in the Eastern

District of Kentucky, and elsewhere,

LEON SMITH,

knowingly possessed and used, without lawful authority, means of identification of other

persons listed below, that is, names, forged signatures, and unique Internal Revenue
Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 5 of 8 - Page ID#: 5

Service ("IRS") check identification numbers, knowing that each such means of

identification belonged to another actual person, during and in relation to the commission

of the wire fraud scheme charged in Counts 1 through 4 of this Indictment.

Count Date Initials of Means of Identification


Victim's Name Transferred, Possessed, and Used
5 December 12, 2012 J.L. Federal Tax Refund Check Bearing
Forged Signature and IRS Check
Identification Number
6 May 17, 2013 J.L. Federal Tax Refund Check Bearing
Forged Signature and IRS Check
Identification Number
7 January 28, 2013 J.D.H. Royalty Check Bearing Forged
Signature
8 February 6, 2013 J.D.H. Payroll Check Bearing Forged
Signature
9 March 8, 2013 J.D.H. Payroll Check Bearing Forged
Signature
IO March 27, 2013 J.D.H. Payroll Check Bearing Forged
Signature
11 April 9, 2013 J.D.H. Payroll Check Bearing Forged
Signature
12 February 15, 2013 S.M. Payroll Check Bearing Forged
Signature
13 February 28, 2013 S.M. Payroll Check Bearing Forged
Signature

Each in violation of 18 U.S.C. 1028A.

COUNT 14
18 u.s.c. 1957

14. The allegations contained in Paragraphs 1 through 11 of this Indictment are

realleged and incorporated by reference as if set forth fully herein.

15. Central Bank is a federally-insured financial institution.

16. On or about January 29, 2013, in Fayette County, in the Eastern District of

Kentucky,
Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 6 of 8 - Page ID#: 6

LEON A. SMITH

knowingly engaged and attempted to engage in a monetary transaction affecting interstate

commerce, in criminally derived property of a value greater than $10,000, that is, the

withdrawal of $12,500 from Central Bank account ****6146 in the name ofLSMG,

LLC, to fund check number 1201 made payable to MCIC LLC. These funds are derived

from specified unlawful activity, that is the wire fraud scheme alleged in Counts 1

through 4, that violates 18 U.S.C. 1343.

All in violation of 18 U.S.C. 1957.

FORFEITURE ALLEGATIONS
18 U.S.C. 981(a)(l)(C)
18 U.S.C. 982(a)(l)
28 U.S.C. 2461(c)

17. The allegations contained in Paragraphs 1 through 11, Paragraph 15, and

Paragraph 16 of this Indictment are hereby realleged and incorporated by reference for

the purpose of proposing the forfeiture allegations pursuant to 18 U.S.C. 981(a)(l)(C)

and 982(a)(l) and 28 U.S.C. 2461(c).

18. Upon conviction of the offenses in violation of 18 U.S.C. 1343 set forth

in Counts 1-4 of this Indictment, and upon conviction of the offense in violation of 18

U.S.C. 1957 set forth in Count 14 of this Indictment, LEON SMITH shall forfeit to the

United States of America, pursuant to 18 U.S.C. 981(a)(l)(C) and 28 U.S.C. 2461(c),

any property, real or personal, which constitutes or is derived from proceeds traceable to

the offenses, and pursuant to 18 U.S.C. 982(a)(l), any property, real or personal,

involved in such offense, or any property traceable to such property including the
Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 7 of 8 - Page ID#: 7

following:

MONEY JUDGMENT:

$1,298,506.82, representing the approximate gross proceeds derived from the offenses.

19. If any of the property described above, as a result of any act or omission

of LEON SMITH:
a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has been placed beyond the jurisdiction of the court;

d. has been substantially diminished in value; or

e. has been commingled with other property which cannot be divided

without difficulty,

the United States of America shall be entitled to forfeiture of substitute property pursuant

to 21 U.S.C. 853(p), as incorporated by 28 U.S.C. 246l(c).

All pursuant to 18 U.S.C. 98l(a)(l)(C) and 982(a)(l) and 28 U.S.C. 246l(c).

Bil,J I

FOREPERSON

CARL TON S. SHIER, IV


ACTING UNITED STATES ATTORNEY
Case: 5:17-cr-00062-JMH-REW Doc #: 1 Filed: 05/04/17 Page: 8 of 8 - Page ID#: 8

PENALTIES

COUNTS 1-4: Not more than 20 years imprisonment, $250,000 fine, or twice the
value of the monetary instruments or funds involved, and 3 years
supervised release.

COUNTS 5-13: If convicted of one count: Mandatory term of imprisonment for 2


years to run consecutively to any term of imprisonment imposed on
Counts 1-4 or Count 14.

If convicted of two or more counts: 2 years imprisonment, which


may run concurrently, in whole or in part, with any other term of
imprisonment imposed for Counts 5 through 13, but consecutively to
any term of imprisonment imposed on Counts 1-4 or Count 14.

Plus, not more than $250,000 fine and 1 year supervised release on
each count of conviction on Counts 5 through 13.

COUNT 14: Not more than 10 years imprisonment, $250,000 fine, or twice the
value of the monetary instruments or funds involved, and 3 years
supervised release.

PLUS: Forfeiture, as alleged.

PLUS: Mandatory special assessment of $100 per count.

PLUS: Restitution, if applicable.