HOUSTON – The 75-year-old
long time fugitive known as “Butch” Ballow has received a second federal
sentence - 40 years - following his admission of defrauding investors in a
Nevada company with shares traded on the over-the-counter securities market,
announced U.S. Attorney Ryan K. Patrick. Harris Dempsey aka “Butch” Ballow,
formerly of formerly of Galveston County, pleaded guilty Feb. 2, 2018, to wire
fraud and conspiracy to commit wire fraud.
Today, U.S. District Judge
Ewing Werlein Jr. sentenced Ballow to serve 40 years in federal prison – the
statutory maximum. He was further ordered to pay $37,544,944 in restitution. At
the hearing, the court heard from one victim whom Ballow defrauded out of $5
million. The victim explained that Ballow used religious pretenses to convince
victims to invest money and that he presented himself in Mexico as a type of
missionary. He further mentioned that he knew victims who had lost their life
saving to Ballow.
added that in all his decades on the bench, he could not think of a more
outrageous fraudulent crime spree, calling it “despicable” and noting there
were more than 500 victims.
Attorney (AUSA) John Lewis told the judge Ballow was a “financial predator” who
would keep committing fraud as long as he was out of jail and explained Ballow
had been using fake names to commit fraud since at least the early 1980s when
he was convicted of a financial crime against a jewelry store in San Diego.
In this case,
Ballow admitted to defrauding investors in E-SOL International Corporation.
At the time of the offense,
Ballow was a fugitive from justice in the United States. He had previously been convicted of
money laundering that centered on misrepresentations made in connection with
the purchase and sale of stock. Ballow pleaded guilty in that case before
U.S. District Judge David Hittner and was released on bond. He was set for
sentencing Dec. 16, 2004, but failed to show, having fled the country for Mexico where he lived for almost
five years under a series of fake names. While there, he defrauded numerous
investors through a new scheme which is the basis for the sentencing today.
At the time of his plea,
Ballow admitted that in 2005, while living as a fugitive in Mexico under the
name John Gel, he purchased the majority of the publically traded shares of
E-SOL and installed fictitious persons named Robert Remington and Marilyn
Desimone as officers. At the time, E-SOL had almost no assets and
conducted no business. Nonetheless, over the course of the next four
years, Ballow sold E-SOL stock to investors in return for millions of dollars
by deceiving them about the company’s assets and finances, while hiding his
identity, his criminal convictions and his status as a fugitive.
In June 2008, Ballow
pretended to be a banker named Tom Brown and convinced an American investor
living in Puerto Aventuras, Mexico, to purchase E-SOL stock for $5
million. Ballow convinced the investor that E-SOL was developing a golf
and recreational resort community in the jungle west of Cancun. However,
the resort was fictitious and the stock was worthless. Ballow soon fled
from Puerto Aventuras and surfaced under a new name a few months later in
Puerto Vallarta, Mexico, where he continued to defraud investors.
Ballow was ultimately arrested by Mexican authorities July 13, 2010, in
Nuevo Vallarta, Mexico, and extradited to the United States the following year.
Once in the United States, Judge Hittner ordered him to prison for 10 years
in prison and to pay $10 million in restitution for the 2003 money laundering
Several other persons have been convicted
of conspiring to commit wire fraud with Ballow while he was in Mexico and
ordered to federal prison including Austin lawyer Patrick Lanier, 69, and
Christopher Harless, 65, of Georgetown, who are currently 17 and 20 years in
federal prison, respectively. Other co-conspirators are awaiting sentencing or
remain fugitives in the case.
The FBI and IRS - Criminal
Investigation conducted the investigation with the assistance of the U.S.
Marshals Service and U.S. Postal Inspection Service. The United States
government also received extensive and valuable assistance from the governments
of Mexico and Canada.
AUSAs John R. Lewis and
Belinda Beek prosecuted the case.