United States of America v. Earl Miller

South Bend, Indiana criminal defense lawyer represented the Defendant charged with wire fraud and securities fraud.



In 2009, Miller was hired by a childhood friend, Matthew

Gingerich, to raise money for Gingerich's real estate invest

ment firm, 5 Star Investments. 5 Star raised capital to finance

the rehabilitation of properties, mostly in Northern Indiana

where the company was based, by issuing promissory notes

to investors in exchange for their contributions. These notes

promised investors around 10% in returns paid out in

monthly installments over 30 months, at which time the in

vestors were promised to be paid their principal investment.

By 2011, Miller co-owned 5 Star with Gingerich and was

solely responsible for the investor side of the business. In this

role, Miller, with the assistance of 5 Star's legal counsel, pre

pared 5 Star's Private Placement Memoranda (PPMs), which

served as investment contracts. The PPMs generally assured

investors that 5 Star planned to use the funds for residential

real estate investments and would not allocate them to non

real estate ventures without prior agreement. The PPMs in

cluded various other promises, including that Miller would

not be paid a salary, that 5 Star would not advertise invest

ment opportunities through general solicitation, and that

securities would be sold only to "accredited” or "sophisti

cated” investors.



In July 2014, Miller bought out Gingerich for $2.5 million

and became the sole owner of 5 Star. By that time the business

had grown into 15 related LLCs operating under the 5 Star

name and expanded to include properties outside of Indiana.

As the sole owner, Miller was responsible for both the invest

ment and operations sides of the business. He also became the

sole signatory on company checks and the sole decisionmaker

regarding the spending of investor funds.



Shortly after Miller took over 5 Star, he began diverting

investor funds for personal purposes contrary to the terms in

the PPMs. Between July 2014 and August 2015, Miller used

over $645,000 in investor money to help pay off his debt to

Gingerich; he paid over $214,000 to a personal spiritual advi

sor; and he personally pocketed over $914,000 directly out of



Also contrary to the PPMs, Miller ran advertising cam

paigns, which he mainly targeted toward the Amish commu

nity in Indiana. Many of the Amish investors that Miller tar

geted had an eighth-grade education and limited or no invest

ing experience. Miller himself was raised in an Amish com

munity.



Starting in February 2015, Miller also began to wire inves

tor funds to various "green products” companies that were

operated by his friends. Miller did no due diligence on these

businesses, nor did he seek investor permission before mak

ing payments. Miller eventually developed and issued a new

PPM in March 2015, which stated that 5 Star was expanding

its business into green energy products, though, by then, he

had already transferred hundreds of thousands of dollars.

Further, the new PPM included false statements about 5 Star's

plans for those investments. For example, the PPM repre

sented that 5 Star would use investor money to distribute

green products for which 5 Star owned the patent. But 5 Star

held no such patents and never had plans to distribute any

such products. Miller ultimately wired over $1.7 million of in

vestor money to his friends' companies, and the payments

made little to no returns for investors.



By July 2015, 5 Star was struggling financially and it had

stopped paying out returns to its investors, though Miller

continued to solicit and accept new investments anyway.

Around this time, Miller again used investor funds without

authorization to hire a company, Global Impact, to take over

the day-to-day management of 5 Star and turn the company

around. Miller also used investor funds to hire a law firm,

Cozen O'Connor, to handle legal issues. Soon after Global Im

pact was hired, with investors calling 5 Star's offices asking

for their unpaid interest checks, Miller left town and took his

family to Florida. While he was away, Miller continued to

make wire transfers between and out of 5 Star accounts.

Global Impact continued to run 5 Star until early 2016 when

Miller filed for bankruptcy and a trustee assumed control of

the 5 Star entities.

A jury convicted Miller on one count of securities fraud

and five counts of wire fraud. It acquitted him on one wire

fraud count relating to one victim who did not testify and on

the false statement charge in connection with the bankruptcy

proceedings. Miller filed a post-trial motion for acquittal,

which the district court denied.



Affirmed