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SALT LAKE CITY — A Draper man who told investors he was a family man and faithful LDS Church member is headed to prison for securities fraud.
A federal judge sentenced Andrew D. Kelley, 41, to seven years in prison and three years of probation after he is released. The judge also ordered him to pay nearly $8 million in restitution. Kelly is scheduled to report to prison in January.
Kelley pleaded guilty to one count of securities fraud earlier this year in connection with an investment scheme through his company, Blackbird Capital Partners. In exchange, prosecutors dropped 14 other securities fraud, wire fraud and money laundering charges against him.
Kelley admitted that in an effort to lull investors into a false sense of security, he claimed high returns in Blackbird's day-trading business when in fact he lost millions of dollars and diverted money for himself, according to court documents.
He also told investors he was a family man and a faithful member of The Church of Jesus Christ of Latter-day Saints.
Blackbird was supposed to invest money in various security and futures instruments, but investor funds were used to pay returns to earlier investors and for other personal and business expenses.
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Draper man accused in Ponzi scheme admits to securities fraud
A Draper man who told investors he was a faithful member of the LDS Church has admitted to securities fraud in a plea deal with federal prosecutors.Kelley told one investor that he had "screwed up" and lost $6 million, according to court documents. He initially blamed the loss on Brexit but then told the investor he used his money to "plug old holes" and pay other investors due to trading losses.
When the investor confronted him, Kelley said, "I am delusional. I am a compulsive liar," court documents say. Kelley told the investor he could "trade his way out of it" to repay him if he wouldn't report him to authorities. Email: romboy@deseretnews.com Twitter: dennisromboy
