By Georgia Hill
Two men who admitted conspiring to commit mail and wire fraud await sentencing for cheating 22 investors out of more than $2 million from June 2016 to April 2018.
Former Pittsburgh resident Jonathan Freeze and Kevin Carney of Euclid, Ohio, have pleaded guilty in federal court in Pittsburgh.
Freeze, Carney, and a third defendant, Robert Irey, who died after also pleading guilty, created a business called Alternative Energy Holdings to use investments from their victims to build plants that would convert biodegradable waste into renewable energy, according to the U.S. Department of Justice.
Jonathan Freeze and Kevin Carney pleaded guilty to defrauding investors out of over $2 million in the federal courthouse in Pittsburgh. Source: Preservation Pittsburgh
According to the department, they promised high rates of returns to prospective investors who made short-term loans. The three defendants assured those investors that they would use all of the loan money for the company.
However, they instead used it for their own benefit, including gambling, repaying loans, personal legal fees, and even to make restitution from a previous unrelated criminal conviction for fraud.
Despite the promised high returns, they repaid only around $63,000 to some victims from loan proceeds they received from other victims in a “Ponzi-like scheme,” according to court documents.
Freeze and Carney even falsely claimed they had invested $600,000 of their own money in the company and asserted that one of their green energy projects had already been funded, with five more on track to be built.
The defendants transferred a portion of the “loan” proceeds interstate and distributed the money amongst themselves across state lines, making it a federal crime.
Carney’s sentencing is set for December and Freeze’s sentencing is scheduled for January. They face up to 20 years in prison, a fine of up to $250,000 and a restitution order.
The U.S. Attorney’s office for the Western District of Pennsylvania, and defense attorneys Marco Attisano and Chris Eyster declined to comment on the case after emails from Great Lakes Echo requesting more information.