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Date: 09-28-2021
Case Style:
Case Number: 8:20-cr-00052-JLS
Judge: Josephone L. Staton
Court: United States District Court for the Central District of California (Orange County)
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Description: Santa Ana, CA: Criminal defense lawyer represented defendant charged with mail fraud and filing false tax returns.
Kent R.E. Whitney, 39, formerly of Newport Beach but who currently resides in Northern California, was changed in a two-count information charging him with mail fraud and filing a false federal income tax return.
From September 2014 to April 2019, Whitney schemed to defraud investors through the Church of the Healthy Self (CHS), a non-profit corporation, and its related entities, including CHS Asset Management, Inc. Whitney founded these entities, operated them out of a strip mall in Westminster, and claimed to be the pastor of CHS.
At Whitney’s direction, CHS representatives appeared on television and at live seminars at CHS offices to solicit investments in CHS Trust, the church’s investment arm. Recordings of these appearances frequently were uploaded onto YouTube.
In these appearances, at Whitney’s direction, CHS representatives made false or misleading claims, including: CHS Trust guaranteed an annual rate of return of 12 percent; CHS Trust guaranteed a return of principal with no risk because it was federally insured; the worst return received during the previous five years was a 1.5 percent profit for the month of January 2015; traders used by CHS had not lost money in 15 years; and CHS was audited by accounting firm KPMG.
In fact, little investor money went into any trading accounts.
Relying on these false statements, victim-investors sent more than $33 million to CHS from 2014 to 2019. As part of the scheme, Whitney directed that monthly statements be sent to victims that contained false reports of investment returns. Whitney intended to lull victims into believing their money had been invested and was consistent with the false claims made by CHS representatives. Whitney also made approximately $11 million in Ponzi-type payments to investors, taken from money brought in by later victims.
Whitney also knowingly and willfully signed and filed a false federal income tax return that reported that his total income for the tax year 2018 was $17,539. In fact, as Whitney knew, his true income for that year was at least $452,872, of which approximately $435,333 was obtained via Whitney’s CHS fraud. The resulting tax loss was at least $130,808.
The FBI and IRS Criminal Investigation investigated this matter. The Securities and Exchange Commission provided substantial assistance with the investigation.
Assistant United States Attorney Gregory W. Staples of the Santa Ana Branch Office prosecuted this case.
Outcome: Defendant is committed to the custody of the Bureau of Prisons for 168 MONTHS. Supervised release for 3 years. This terms consists of 3 years on Count 1 and 1 year on Count 2, to run concurrently under the terms and conditions of US Probation and Pretrial Services office and Second Amended General Order 20-04. Special assessment of 200. Restitution of 22,662,668.58. Interest on the restitution ordered is waived. All fines are waived.
Plaintiff's Experts:
Defendant's Experts:
Comments: