Fort Smith businessman Moates faces potential life in prison for numerous wire, mail fraud charges

William Moates Jr., 49, whose businesses included the restaurant Blaze’n Burrito and a credit card processing company, has pled guilty to numerous counts of wire fraud and other felonies committed over a five-year period. Penalties for the numerous charges could send Moates to prison for life.

According to a statement Tuesday (Oct. 11) from Kenneth Elser, U.S. Attorney for the Western District of Arkansas, Moates pled guilty to the following counts:
• Two counts of wire fraud;
• One count each of mail fraud;
• Theft in receipt of federal funds
• Money laundering; and
• Theft or embezzlement from an employee benefit plan.

The plea deal was made in the court of U.S. District Court Judge P.K. Holmes III, Western District of Arkansas.

Moates’ businesses included Trilennium Financial Alliance, an investment, tax and accounting firm; T3Vest, an investment arm of Trilennium; Burrito Brothers, which operated a restaurant called Blaze’n Burrito; and B3NWCR, a credit card processing company operating under the name “Guardian.” Guardian Payment Systems separated from Moates’ company almost two years ago and is not affiliated with any of the counts against Moates.

According to the statement from Elser’s office, Moates, “with the assistance of others, solicited and received monies from investment clients and employee benefit plans that Moates represented he would use to invest in various products to include annuities, precious metals, businesses, precious stones, art, automobiles and real estate.”

A key part of Moates’ fraud, according to Elser, was in establishing bank accounts that have him signature authority to link the accounts and transfer money between them. Such a scheme allowed him to avoid detection by those he sought to defraud.

“From early-to-mid 2010 to January 2015, Moates received investments from at least 25 different client investors, which were not invested as represented by Moates. Instead, those monies were diverted by Moates to his own personal use, to pay back other investors, and by Moates and others to the use of the various businesses,” according to the explanation for Elser’s office. “Moates used investor funds to renovate his home, take vacations, make credit card payments, make payments to personal iTunes and Amazon accounts, make contributions to local charitable organizations, and make home mortgage payments. Moates and others also diverted investor funds to pay operating and other business expenses for the businesses.”

Moates also fraudulently redirected $200,000 of $2.5 million in federal money through Physicians Alliance, a company initially set up to essentially be a payment channel for medical services with money from the federal Centers for Medicare & Medicaid Services.

Also in the plea agreement was a scheme by Moates that cost a Fort Smith swimming pool company between $3.5 million and $9.5 million in investments related to an “Employee Retirement Income Security Act” (ERISA) benefit plan.

“The company initially funded the plan with a $150,000 check, which was given to Moates. Moates established a bank account for the plan and provided the bank with a forged document purporting to have been signed by an agent of the company, which made T3Vest the plan sponsor. This allowed Moates to deposit the check into an account controlled by him, and he never invested the money on behalf of the plan,” noted Elser’s statement.

Following are other counts against Moates to which he pled guilty.
• Moates deposited $500,000 in investor funds in the form of a check, which caused an interstate wire to be sent from the Western District of Arkansas to the Federal Reserve Bank in St. Louis, Missouri, in order to settle the check. Moates did not invest those funds as he had represented to the client.

• Moates sent an email from the Western District of Arkansas to an insurance brokerage firm in Topeka, Kan., which had documents attached to it representing that an investment client had more than $7.5 million in annuities. The documents were completely fabricated and were used to obtain an insurance policy for that client.

• Moates mailed two annuity surrender requests for an investment client from the Western District of Arkansas to Austin, Texas, utilizing UPS, after representing to the client that he would invest the proceeds. Moates later received the proceeds from the surrender requests and never invested them as represented. Moates utilized $20,000 of those proceeds to make a credit card payment.

Moates’ sentencing date has not been set. Each count of wire fraud carries a maximum penalty of 20 years imprisonment, a maximum fine of $250,000 or both. Mail fraud carries a maximum penalty of 20 years imprisonment, a maximum fine of not more $250,000, or both. Theft Concerning Programs Receiving Federal Funds carries a maximum penalty of 10 years imprisonment, not more than $250,000 fine, or both. Money laundering carries a maximum penalty of 10 years imprisonment, a maximum fine of 250,000 or twice the value of the property involved in the transaction, or both. Theft or Embezzlement from Employee Benefit Plan carries a maximum penalty of 5 years imprisonment, not more than $250,000 fine, or both.