An Indiana man was sentenced to a 22-year prison term for bilking hundreds of victims out of at least $16 million in a Ponzi scheme that touted double-digit returns from used-car loans. Thomas Kimmel, 68, was convicted by a federal jury in June on conspiracy, mail fraud, and money laundering charges. In addition to the sentence, Kimmel was also ordered to pay $16.5 million in restitution to his victims, which included his wife, sister, and brother-in-law.
Kimmel was a director of Sure Line Acceptance Corporation ("SLAC") and the President of Faithful Stewards Incorporated ("FSI"). SLAC was responsible for financing for Automacion, a used-car dealer with dealerships throughout Indiana which hired Kimmel in 2006. Kimmel used his company, FSI, to solicit potential investors, emphasizing his religious ties and decades as a financial planner as he hosted conferences throughout the country advertised as "debt-free conference" and "God's Plan for His Money Conferences." Kimmel told potential investors that their funds would be used to fund these used-car loans, and that they could expect a monthly 1% return that was both risk-free and backed by collateral. Additionally, Kimmel told investors that he had set up a "spiritual board of directors" to oversee his company. In total, more than 300 investors, many of them retirees or senior citizens, entrusted approximately $20 million with Kimmel.
However, despite his promises that his investment opportunity was risk-free and backed by collateral, the reality was that SLAC was far from risk-ree and was in fact hemorrhaging money. Nor were investors told that Kimmel received nearly $2 million in commissions from SLAC for business he generated or that the local church leaders endorsing the legitimacy of his venture were also receiving a 1% commission. In reality, funds from new investors were being used to pay returns to existing investors - a classic hallmark of a Ponzi scheme. After SLAC suffered financial problems, many investors ended up losing their entire investment. Three officers at SLAC, James Willis Kirk Jr., Glen E. Smith Jr. and Carol April Graff, were eventually sentenced to prison for their role in the fraud.
Kimmel was ordered to report to prison in one month.