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Date: 03-31-2019
Case Style:
United States of America v. Dennis Gibb
Case Number: 2:19-cr-00059-RSM
Judge: Ricardo L.P. Fund
Court: United States District Court for the Western District of Washington (King County)
Plaintiff's Attorney: Matthew Diggs
Defendant's Attorney: Michael D. McKay
Description:
Seattle, WA - Long-Time Redmond, Washington Investment Advisor Pleads Guilty to Defrauding Investors of more than $3 Million
Admits Falsifying Financial Statements – Used Investor Money for Own Expenses
A long-time investment advisor in Redmond, Washington pleaded guilty in U.S. District Court in Seattle to defrauding some 15 investors of more than $3 million, announced U.S. Attorney Brian T. Moran. DENNIS GIBB, 72, the President and owner of Sweetwater Investments Inc., pleaded guilty to wire fraud and falsification of records with the intent to obstruct a matter within the jurisdiction of the Securities and Exchange Commission (SEC). Simultaneously, GIBB and Sweetwater investment entered into a consent decree with the SEC liquidating the Sweetwater Income Flood LP Fund and barring GIBB from further investment activity. Chief U.S. District Judge Ricardo S. Martinez scheduled sentencing in the criminal case for June 28, 2019.
“Sadly, this defendant sold his investors a dream of a safe retirement, representing that he would use a sophisticated investment strategy, including investing in government bonds, to produce stable returns. Instead, Dennis Gibb used investor funds to pay business expenses for Sweetwater Investments, as well as mortgage and car payments and other living expenses,” said U.S. Attorney Brian T. Moran. “He told investors there was $7.8 million in the fund – the reality was there was less than $2 million. The investors no longer have the safe retirement income they were promised.”
According to the criminal case filings and the SEC consent decree, GIBB created Sweetwater Income Flood Limited Partnership, a private fund Gibb managed, in 2008. As early as 2007, he began soliciting investors for the fund targeting those who wanted steady retirement income in the near future. According to the SEC between 2007 and 2018, about 20 investors put about $7.3 million into the fund. GIBB secretly transferred more than $3.1 million from the fund for his own expenses. To hide his theft, GIBB sent investors falsified quarterly account statements. When the SEC began an examination of the Sweetwater Investments in May 2018, GIBB provided false records to examiners indicating the fund had been liquidated.
In his plea agreement GIBB agrees to forfeit a money judgment in the amount of $3,197,401. Gibb will also owe full restitution for the amount he stole. The government will recommend that any money collected on the money judgment go toward the defendant’s restitution obligation. The SEC is ordering GIBB to liquidate the approximately $1.8 million remaining in the Income Flood Fund and provide it to the SEC for disbursement to victims.
Wire fraud is punishable by up to 20 years in prison. Falsification of records is punishable by up to three years in prison. Prosecutors have agreed to recommend no more than 78 months in prison. The court is not bound by the recommendation, the sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case was investigated by the SEC and the FBI.
Charge:
Wire Fraud - 18:1343
(1)
Falsification of Records in Connection with SEC Examination - 18:1519
(2)
Outcome: 03/28/2019 3 WAIVER OF INDICTMENT by Dennis Gibb (KMP) (Entered: 03/28/2019)
03/28/2019 4 Minute Entry for proceedings held before Hon. Paula L McCandlis- CRD: K. Peter; AUSA: Matthew Diggs; Def Cnsl: Michael Mckay; PTS: Lorraine Bolle; Court Reporter: Digital Recording; Time of Hearing: 11:30am; Courtroom: 12B; INITIAL APPEARANCE AND PLEA as to Dennis Gibb held on 3/28/2019. Defendant present with retained counsel. Defendant placed under oath and advised of rights/charges/penalties; Defendant executes Consent to Rule 11 Plea in a felony case before a U.S. Magistrate Judge; Defendant waives indictment by the Grand Jury; Defendant age = 72 years old; Education = Graduate & Honorary Degrees; Court reviews the plea agreement; Pleas guilty to count(s) 1, 2; Court finds the Defendant is competent to enter a guilty plea; Court signs the Report and Recommendation and Counsel have fourteen days to file objections; Court orders the preparation of a Presentence Report. Parties agree to defendant's release on conditions recommended by Pretrial Services. Defendant placed on appearance bond.
Sentencing set for 6/28/2019 at 11:30 AM in Courtroom 13206 before Judge Ricardo S. Martinez. (KMP) (Entered: 03/28/2019)
03/28/2019 5 CONSENT TO RULE 11 PLEA in a felony case as to Dennis Gibb (KMP) (Entered: 03/28/2019)
03/28/2019 6 PLEA AGREEMENT as to Dennis Gibb (cc: USPO, FLU, AFU) (KMP) (Entered: 03/28/2019)
03/28/2019 7 REPORT AND RECOMMENDATION re Plea of Guilty as to Dennis Gibb by Hon. Paula L McCandlis. Noting Date 4/12/2019. (Attachments: # 1 Proposed Acceptance of Plea) (cc: USPO) (KMP) (Entered: 03/28/2019)
03/28/2019 8 Appearance Bond Entered as to Dennis Gibb (1) Released w/PTS Supervision and other special conditions. (cc: PTS/USPO/USMO) (KMP) (Entered: 03/28/2019)
Plaintiff's Experts:
Defendant's Experts:
Comments: