GRAND RAPIDS, Mich. — The former CEO of an investment firm in Grand Rapids has been sentenced for defrauding investors of $5 million.
The U.S. Attorney’s Office – Western District of Michigan (DOJ) says 61-year-old Gifford “Chip” Cummings Jr. pleaded guilty to investing $5 million of clients’ money at Red Oak Capital without proper authorization.
We’re told the crime took place in December 2019, after which the investment reportedly lost value by hundreds of thousands of dollars.
The DOJ says his business partners discovered what Cummings had done with the money and told him to get it back. However, he instead put forth edited account statements to make it look as though the investment’s performance was better than reality.
The firm only made back $761,522.90 out of the $5 million investment, federal attorneys explain. The company also learned Cummings didn’t repay a $1,350,000 debt, which had been masked as repaid when it had actually been put into a bank account within his control.
“Mr. Cummings deliberately cheated investors out of hundreds of thousands of dollars for his personal gain,” says U.S. Attorney Mark Totten. “Financial fraud is a serious problem, and my office will not hesitate to prosecute fraudsters whose schemes inflict devastating financial harm on legit businesses and honest investors.”
Cummings was sentenced to spend 66 months — or 5 ½ years — behind bars, according to the DOJ. That sentence will precede two years of supervised release.
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