Public Safety

Favor for brother means 2 months in prison for Idaho man

He tried to pay off victim in $2.4M fraud scheme

CEDAR RAPIDS — An Idaho man who conspired to pay off his brother’s victim in a $2.4 million wire fraud and identity theft scheme will spend two months in federal prison.

David Emerson Smith, 71, of Pocatello, Idaho, pleaded in May in U.S. District Court to one count of conspiracy to obstruct, influence and impede an official proceeding.

During the May hearing, David Smith admitted he agreed with his brother, Darrell Smith, 62, a former Forest City investment adviser, to obstruct, influence and impede his brother’s sentencing in late 2018.

While awaiting a sentencing hearing, Darrell Smith told David Smith, in a June 2017 recorded phone call from the Bremer County Jail, that one of the victims in his fraud scheme, in which he stole money from clients to fund an ethanol plant in Hopkinton, could “make it really hard” for him if she continued to “complain” to prosecutors.

Darrell Smith told his brother it would be “two extra years” if the woman continued to complain but that he could get her some stock shares within a year if she stopped, according to the plea agreement.

At Darrell Smith’s request, David Smith agreed to contact the woman in February 2018 and sent a letter indicating Darrell Smith had $40,000 for her, in her children’s names, in accounts at an investment company.

The letter also reminded the woman she had “$350,000 in tax credits” and 2 million shares of an energy company available to her, the plea shows. However, the “tax credits” and shares were not real.

Authorities discovered the scheme before Darrell Smith’s sentencing in October 2018.

A judge found Darrell Smith stole $2.4 million from his investors, including $161,800 from the victim David Smith contacted.

The court also found Darrell Smith obstructed justice and sentenced him to more than 14 years in prison. He was ordered to pay more than $1 million in victim restitution.

Darrell Smith was convicted in 2017 of wire fraud and aggravated identity theft.

U.S. District Chief Judge Leonard Strand sentenced David Smith on Tuesday to two years in prison and fined him $5,500. He also was ordered to make, jointly with his brother, $161,800 in restitution to the victim of the obstruction.

David Smith was released on bond and is to surrender Jan. 2 to the U.S. Marshals Service in Boise, Idaho, to begin his prison sentence.

Comments: (319) 398-8318; trish.mehaffey@thegazette.com