Scammed investors out of milliions of dollars

By TAVIA D. GREEN • The Leaf-Chronicle • November 15, 2010

http://www.theleafchronicle.com/article/20101115/NEWS01/101115018

A Clarksville woman was sentenced to 11 years in prison Friday after she admitted to stealing millions of dollars from investors and using the money for her personal use instead of investing it like she promised.

Sheila Kennedy, 59, of Clarksville, was sentenced on Friday, to 136 months in prison for her part in investment-fraud scheme, U.S. Attorney Jerry Martin said today.

Kennedy pleaded guilty to one count of wire fraud, one count of mail fraud, and two counts of money laundering in March 2009.

Kennedy admitted during the plea agreement that she had been involved in the investment-fraud schemes for several years and she and co-conspirators used at least two separate schemes to defraud investors, according to a Department of Justice news release from public information officer David Boling.

Between 2005 and 2006, Kennedy and co-defendant Ann Scarborough solicited investors to invest in fraudulent real estate opportunities in Nevada, Kentucky, and Indiana, the release said.

The real estate scheme required that investors give Kennedy and Scarborough money – often in the form of checks payable to “ASK, LLC,” a company operated by Kennedy and Scarborough, and in return, receive so-called “promissory notes” or “time notes.”

At the 2009 plea hearing, Kennedy admitted that, contrary to her representations to the investors, she never intended to invest the funds in real estate and, in fact, no such real estate opportunities had ever existed. She further admitted that, instead of investing the money she received from investors, she converted the funds to her own personal use and for the benefit of her co-conspirators.

Two of Kennedy’s co-defendants – her husband, Kenneth Kennedy, and her former business partner Ann Scarborough, were recently convicted after a jury trial of multiple counts of wire fraud, mail fraud, and money laundering.

They await sentencing which is set for March 2011. A third co-defendant, Philip Russell, who was scheduled to be tried with Kenneth Kennedy and Ann Scarborough, failed to appear and remains a fugitive from justice.