Cedar Rapids man found guilty of wire fraud, money laundering

A Cedar Rapids man was found guilty Wednesday in federal court of 47 counts of wire fraud, money laundering and making false statements in connection with dice game and mining schemes that cheated investors out of nearly $800,000.

Donald K. Washburn, 62, was found guilty of 30 counts of wire fraud, five counts of money laundering and 13 counts of making false statements to the U.S. Probation Office, after a week long trial in U.S. District Court.

Washburn faces up to 695 years on the 47 charges. His sentencing hasn't been set at this time.

According to the indictment, Washburn had his son approach potential investors in May 2008 through October 2009 to convince them his father was in the process of developing and selling a dice game to casinos. Washburn also told him to tell the investors the television news show "60 Minutes" was going to do a segment on his dice game.

The investors were unaware that Washburn had been previously convicted in 2004 of fraudulently obtaining investments for this same dice game scheme, according to court records.

Washburn promised investors significant returns and fraudulently took about $496,330 from them.

Washburn also created the appearance that he was involved in the mining business during this same time and solicited funds for mining activity from investors and lenders. Washburn would show investors mining related documents and contracts, but some of the mining companies were in default, a false account was set up in a mining company name or he incorporated a mining company name in Iowa and listed his residence as the business office location.

Washburn told investors their money would be used to purchase mines or ore, operation of mines and/or transportation of iron ore, gold, or other minerals from mines, according to the indictment. He also promised investors they would receive high rates of return, but he instead used the funds for his own benefit or for the benefit of his family.

He defrauded investors out of $300,000, according to court records.

Washburn then made false statements to the probation office in September 2009. He claimed to not have certain checking/savings accounts, failed to disclose a wire transfer receipt, failed to disclose several expenditures of more than $500, and falsely claimed he didn't open any new checking or savings accounts when he had.

Washburn was set last month to plead guilty to one count of wire fraud and one count of making a false statement in this case, but he suffered a coronary blockage and had to be admitted to the hospital for surgery. A few weeks after he was released, his attorneys claimed he might not be mentally competent to stand trial, but before the hearing on that motion, it was withdrawn and Washburn decided to go to trial.

If Washburn had taken the plea agreement, he would have faced up to 25 years in prison, fines of up to $1 million, forfeited items involved in the schemes and restitution.