Federal prosecutors said a local attorney’s lone mistake and penalty should serve as a warning to others.
Centerville attorney Steven Scudder was sentenced Friday to 14 months in prison for his role in the $70 million Ponzi scheme run by William Apostelos.
“That’s really what happened here,” assistant U.S. attorney Brent Tabacchi said. “You had an individual who, on one occasion, lied about something to investors, and I think that a 14-month sentence for that conduct sends an important message.”
Scudder, 62, was sentenced in Dayton’s U.S. District Court by Judge Thomas Rose, who told Scudder, “A lot of people were hurt in the Apostelos scheme, and you were a spoke in that.”
Rose said Scudder had led a law-abiding life before his conviction on one count of wire fraud, so that enabled him to sentence the lawyer below the non-binding, advisory range of 41 to 51 months and the probation department’s recommendation of two years.
When asked by the judge if he agreed that he was a low risk for re-offending, Scudder said, “Absolutely, your honor.”
Scudder, whose sentencing memorandum was filed under seal, will be allowed to self-report to the U.S. Marshals to serve his sentence.
Between July 2013 until he resigned in July 2014, Scudder served as trustee of the WMA Trust, a land trust that purported to secure investments that investors made with Apostelos, according to court documents.
Scudder told investigators Apostelos instructed him to falsely hold himself out as the trustee until September 2014. Based on Scudder’s false representations, a 10-member group invested more than $1 million with Apostelos that was used to pay earlier investors rather than being invested.
Tabacchi didn’t ask the judge for any certain length sentence.
“We do believe that the court imposed a significant sentence on someone who had no criminal history and a practicing attorney in this community with a pretty good reputation up until this point,” Tabacchi said. “It sends a significant message that if you are a person in a position of trust like an attorney, that even one misstep, or an intentional misstep, is significant and it’s going to be punished.”
Apostelos is scheduled to be sentenced on June 30 to up to 15 years in prison for a scheme that bilked nearly 480 investors out of at least $20 million.
Apostelos pleaded guilty to conspiracy to commit mail and wire fraud and to conversion of funds from an employee benefits fund — two of 27 indicted counts.
The maximum combined sentences for those offenses is 25 years in prison and a fine of at least $500,000. Defense attorney Art Mullins has said the non-binding sentencing guidelines would place Apostelos in a prison term range from 14 to 17.5 years.
William Apostelos’ sister, Rebekah Fairchild, and his niece, Rebekah L. Riddell, are both scheduled to be sentenced on July 26 for conspiracy.
Connie Apostelos, William’s wife, is scheduled to be sentenced Aug. 2 on one count of money laundering.
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