A former business associate of Hunter Biden was sent to federal prison this week for his role in a fraud scheme to steal $60 million in bonds from a Native American tribe.
Devon Archer received a one-year prison sentence from Judge Ronnie Abrams, who stated the fraud scheme was too serious to let him go free without doing time. He added that the conspiracy caused harm to Native Americans and that the tribe that was affected is one of the poorest in the country.
Archer will be required to pay $15 million personally and $43 million in restitution along with his co-conspirators.
Archer Maintains His Innocence
The convicted criminal has claimed all along that he was innocent of wrongdoing and will appeal the conviction. Archer said during the trial that corrupt business associates took advantage of him and wanted to rope him into the federal crime.
His attorney, Matthew Schwartz, said that Archer was influenced by someone he put too much trust in and failed to ask enough questions.
Archer spoke emotionally during his sentence, saying it was ‘surreal’ that he was facing a federal prison sentence. He told the judge regarding his role in the fraud that he was ‘doing too many things at one time’ and wasn’t paying enough attention.
Archer added that he feels tremendous remorse for the victims and feels terrible about the pain he has caused his family and friends.
Before he was arrested, Archer worked with Hunter Biden on the Burisma Holdings board, which is an energy company based in Ukraine. His attorney noted in court that Archer had ‘real value’ to the company when he served on the board, but he resigned in 2016 after he was arrested.
Biden doesn’t have any connection to the fraud scheme that his friend has been convicted for.
Archer Convicted For Conspiracy To Commit Securities Fraud
Archer was convicted by a New York City Jury for conspiracy to commit securities fraud and securities fraud after the 2018 trial.
Federal prosecutors said that Archer and his co-conspirators purchased more than $60 million in bonds from the Native American trib Oglala Sioux. Instead of using the money for an annuity the way they were supposed to, they used the bonds to start a financial services company.
According to the Department of Justice, Archer and several co-conspirators engaged in a scam that caused the Wakapamni Lake Community Corporation (WLCC) to issue a large number of bonds through lies and misrepresentation. This led clients of several asset management firms to buy the bonds. Then the clients couldn’t sell or redeem them because the bonds weren’t liquid.
The WLCC was encouraged to issue the bonds through false misrepresentations by one of the co-conspirators, John Galanis. Galanis, which Archer’s support, tried to buy a registered investment adviser called Hughes Capital Management. When they took over Hughes, $28 million of the Tribal Bonds were given to Hughes clients.
However, the leaders of Hughes didn’t disclose this fact about the bonds, including that they were not within the proper investment parameters as laid out for many Hughes clients.
Further, Hughes clients were not told about conflicts of interest that existed regarding the issuance of the bonds.
Next, the defendants misappropriated the profits of the Tribal Bond issuance. A lot of the bond proceeds were given to the business and personal interests of the company leaders. Galanis, for example, received over $2 million in profits from the first issuance of the bonds. He spent the money on cars, hotels, and jewelry.
Galanis also used some of the money to buy a $10 million Tribeca apartment that he bought in Archer’s name.
Archer and Galanis also used $20 million of the bond proceeds from the first issuance to buy all of the second issuance. The face value of the bonds increased and the interest payable to the Tribe also increased. But the proceeds of the bonds available to be invested did not go up.
To deposit bonds in a bank, Archer lied about the source of the funds to buy the bonds and said that he got the money from selling real estate. The bonds were used for net capital requirements at two financial dealers where Archer had interests.
Galanis was convicted of securities fraud and investment adviser fraud in 2017 and was sentenced to 12 years in prison.
Prosecutors noted that Archer was key to the fraud and anticipated that when the scheme bore fruit, he could lead the company and make a lot of money when it sold.
After Archer was convicted, the judge granted him a new trial as requested, but this decision was overruled by an appeals court and the conviction was upheld.
Judge Abrams said at the conviction that Archer wasn’t the leader of the conspiracy and didn’t try to obstruct justice as others involved did. Further, Archer didn’t financially benefit from the scam and may have even lost money.
Schwartz requested that Archer be allowed to stay free while the appeal was pending. The judge said she’d rule on the matter after both sides provided briefs on the request.
His attorney also said that Archer disagrees with the verdict and sentence and will appeal. He added that the judge earlier expressed concern that Archer is innocent and repeated that during the sentencing.
However, the judge said she feels constrained and cannot act on her personal assessment of the available evidence.