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Grand Jury Indicts Gilbert Resident for Alleged Investment Scheme

Gilbert, AZ Resident, Gerald Lee Kelly, Indicted for Using Cornerstone Financial Holdings to Bilk Distressed Homeowners

A federal grand jury indicted Gilbert, Arizona resident Gerald Lee Kelly on Wednesday for his alleged role in what prosecutors are calling a “significant financial fraud directed against distressed homeowners.”

According to the indictment, Kelly used his business, Cornerstone Financial Holdings, LLC, to defraud at least eight investors out of approximately $855,000.

Kelly allegedly told investors that their money would be used to fund short-term, high-interest loans to distressed homeowners. He also allegedly claimed that the investments were secured by promissory notes and various interests in homeowner properties.

The indictment alleges that Kelly knowingly misled investors with these claims. According to the indictment, the promissory notes and homeowner properties were inadequate to protect the investors from loss. Kelly allegedly knew this. The indictment also accuses him of misleading investors about the financial state of his company, and of misappropriating investor funds for his personal use.

Kelly has been charged with four counts of wire fraud, six counts of mail fraud, 10 counts of money laundering, and five counts of structuring financial transactions to avoid federal bank reporting requirements. If convicted, he could face up to 20 years in prison for each count of wire fraud and mail fraud, up to 10 years for each count of money laundering, and up to five years for each count of structuring financial transactions to avoid federal bank reporting requirements. His arraignment is scheduled for Jan. 25. For more information, read the government press release.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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