Cedar Rapids Man Who Cheated Investors in Fraud Scheme Sentenced
By Trish Mehaffey, Reporter
CEDAR RAPIDS, Iowa - A 63-year-old Cedar Rapids man was sentenced to more than 11 years in federal prison Thursday for 47 counts of wire fraud, money laundering and making false statements and will pay victims of his gaming and mining schemes more than $840,000.
Donald K. Washburn was found guilty by a jury in April on 30 counts of wire fraud, five counts of money laundering and 13 counts of making false statements stemming from a dice game and mining schemes that cheated investors out of more than $850,000. He faced up to a possible 675 years in prison but a judge sentenced him according to his scoring on the federal guideline range and ran the sentences concurrently for a total of 11 years and five months.
Washburn said he took "full responsibility" for his crime and made a plea for a lesser sentence so he could pay the victims restitution.
U.S. District Chief Judge Linda Reade said this was first time Washburn has admitted to any wrongdoing. He didn't admit to his crime in 2003 when he was convicted in another fraud. She said she doubted that any substantial restitution would be collected even if he wasn't in prison. He never fully paid his restitution in 2003.
"He has had a pattern of defrauding people," she said. "He was convicted in 1973 for counterfeiting."
Reade said there were many aggravating factors of this crime - he committed the fraud while on supervised released from the other fraud conviction, there were repeat victims and this dice game scheme was similar to one used in the previous fraud.
Assistant U.S. Attorney Matt Cole asked the court for an enhanced sentence and immediate restitution for the victims. He said according to financial information collected from probation, Washburn had the ability to pay $150,000 to $350,000 immediately.
Angelo Synder, 25, of Chicago, who was convicted on federal drug and gun charges and was a jail inmate with Washburn, testified for the government. Synder said Washburn told him he intentionally shot himself with a nail gun to delay his trial back in April, and that he had an offshore account with $5 million and a gold mine.
Reade granted the enhancement and ordered Washburn to pay $842,830 in restitution to 13 victims and ordered a lump sum of $50,000 to be paid immediately and a forfeiture of all his property previously ordered in June.
Washburn's two daughters testified about their father's "frailty" of heart and diabetes issues, asking the court to sentence him to less prison time.
Reade said she would recommend he be sent to a prison with medical facilities.
According to the indictment, Washburn in the gaming scheme had his son approach potential investors in May 2008 through October 2009 to convince them his father was in the process of developing and selling a dice game to casinos. The investors were unaware that Washburn had been previously convicted in 2004 of fraudulently obtaining investments for this same dice game scheme, according to court records.
Washburn promised investors significant returns and fraudulently took more than $400,000 from them.
Washburn also created the appearance that he was involved in the mining business during this same time and solicited funds for mining activity from investors and lenders. Washburn would show investors mining related documents and contracts of mines in default, a false account was set up in a mining company name or he incorporated a mining company name in Iowa and listed his residence as the business office location.
Washburn told investors their money would be used to purchase mines or ore, operation of mines and/or transportation of iron ore, gold, or other minerals from mines, according to the indictment. He also promised investors they would receive high rates of return, but he instead used the funds for his own benefit or for the benefit of his family.
He defrauded investors out of $300,000, according to court records.
Washburn then made false statements to the probation office in September 2009. He claimed to not have certain checking/savings accounts, failed to disclose a wire transfer receipt, failed to disclose several expenditures of more than $500, and falsely claimed he didn’t open any new checking or savings accounts when he had.
Washburn initially agreed to a plea deal with the government but then decided to go to trial, according to court records. Before the trial wrapped up he intentionally shot himself with a nail gun to delay the proceedings, which the judge said was willful failure to appear.
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