A former machine shop repairman is scheduled to stand trial this month on charges that he orchestrated a stock fraud scam that defrauded 400 investors, most of them from Los Angeles and Ventura counties, out of $18.5 million, which he used to buy houses, luxury cars, jewelry and to bail out an online pornography business.
A revised set of charges were filed Jan. 26 against Jerry A. Womack, 51, of Las Vegas, who now faces 17 felony counts of wire and mail fraud, as well as money laundering. He could end up in federal prison for up to 160 years with a $20 million fine if convicted on all charges, said Thom Mrozek, spokesman for the U.S. Attorney's Office, which is prosecuting the case.
Prosecutors are alleging that Womack held meetings in which he told investors ranging from widows to professional money managers that his so-called "Womack Dow Principal" could pinpoint stock trends that would pay high returns, court documents show.
He claimed to have as many as four traders working exclusively for him on the New York Stock Exchange floor, investing in the Dow Jones Industrial Index's 30 stocks, according to an October 1999 criminal complaint filed by Brent Robbins, a special agent for the FBI's Ventura office.
According to court records, prosecutors are charging that Womack, who is not a licensed securities broker, really ran a Ponzi scheme from August 1997 through June 1999, using money from later investors to make payments to earlier ones under the guise of Wall Street profits.
He paid out $2 million to $3 million to investors from February through April 1999 alone, enticing beneficiaries to bring relatives and friends to the scam, according to a 1999 affidavit written by Robbins for a search warrant of Womack's Las Vegas home.Lives disrupted
"Some of the victims will lose their life's savings,'' said Mrozek, of the risk associated with the kind of scheme that Womack is charged with orchestrating. "Obviously, that would have an extremely significant and detrimental impact on those victims. When they are elderly and lost their life's savings, it's particularly tragic because these victims are essentially at a dead end. They're not working. They don't have the opportunity to generate income."
The trial in U.S. District Court in Los Angeles is set to begin Feb. 27, unless Womack's attorney, Patrick Maginnis, is granted a delay to study the new charges just filed by the U.S. Attorney's Office. The original charges were filed more than a year ago.
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