GRAND RAPIDS, MI – The former CEO of a Grand Rapids investment firm was sentenced to prison and ordered to pay nearly $6 million in restitution to investors he defrauded.
Gifford “Chip” Cummings Jr., 61, of Grand Rapids, was sentenced Thursday, Dec. 5, to five years, six months in prison by U.S. District Judge Jane Beckering in Grand Rapids.
Cummings remains free until he is ordered to self-surrender by the U.S. Bureau of Prisons or U.S. Marshals Service.
Once his prison term ends, he will spend two years on supervised release. He was ordered to pay victims $5,755,477 in restitution.
He defrauded investor clients at Red Oak Capital, federal prosecutors said.
“Mr. Cummings deliberately cheated investors out of hundreds of thousands of dollars for his personal gain,” U.S. Attorney Mark Totten said in a statement.
Cummings was president and CEO of Red Oak Capital when, in November 2019, he invested $5 million under Red Oak control into a “risky hedge fund.”
The money was intended for investment in commercial real estate.
Once Cummings’ partners learned of the unauthorized investment, which immediately began losing money, they demanded he redeem the investment.
“Instead, Defendant created a falsified redemption letter and falsified account statements, which he provided to his partners by e-mail …,” Assistant U.S. Attorney Davin Reust wrote in court documents.
“By the time Cummings’ business partners could cash out that investment, it was only worth $761,522.90—a $4,238,477.10 loss,” Reust wrote.
Red Oak’s own investigation also showed that Cummings had made it appear he had repaid a $1,350,000 debt. He actually had put the money in a bank account he controlled, prosecutors said.
The FBI investigated the case. The FBI has an “unwavering commitment to addressing both financial and cybercrimes, especially those perpetrated by individuals in positions of trust,” Cheyvoryea Gibson, special agent in charge in Michigan, said in the statement.
Defense attorney Thomas Kuiper said in court documents that Cummings acknowledged his crimes. He had never been in trouble before.
He said Cummings is a good father and has strong support from family and friends.
“Mr. Cummings excelled for decades in this field and assisted hundreds of individuals and businesses in financing countless real estate transactions,” he said.
He is working full-time as an Uber driver. His return to the real-estate mortgage industry after prison is unlikely.
“Notwithstanding the shortcomings that bring him before the Court, Mr. Cummings remains a 61-year-old person that remains highly regarded by those close to him,” Kuipers wrote.
“Put simply, Mr. Cummings is an intelligent, generous individual that cares for others and has a demonstrated history of mentoring and educating others in his family and industry.”
This post was originally published on this site be sure to check out more of their content.
