Dauphin County man sentenced to 12 years in prison for loan fraud, bankruptcy schemes
A former Derry Township resident was sentenced this week to 12 years in federal prison and ordered to pay nearly $1.6 million in restitution after pleading guilty to a series of charges connected to personal bankruptcy and business loan fraud schemes.
The U.S. Attorney's Office for the Middle District of Pennsylvania said the case against Michael Jay Jackson, 59, was two-fold.
Jackson first pleaded guilty in 2017 to an indictment with multiple counts of wire fraud, bankruptcy fraud, false bankruptcy declarations and aggravated identity theft. Investigators alleged that he defrauded his creditors, the Bankruptcy Court for the Middle District of Pennsylvania and his wife by filing seven bankruptcy petitions, including five under his name and two under his wife's name without her knowledge or consent.
He also pleaded guilty this week to two separate counts of wire fraud and money laundering after allegedly creating a bogus business venture and bilking 22 victims out of about $1.7 million.
U.S. Attorney David Freed said Jackson registered a corporation in 2007 by the name of Intex Building Materials Group Inc. and used the company for a decade to convince people to give him loans to pay for his personal expenses.
Freed's office said Jackson told victims that he had the financial backing of New York City-based capital investment company Brookstone Partners to acquire companies that manufactured building products. He allegedly promised his victims huge returns on what were supposed to be short-term loans to cover his personal expenses while they awaited consummation of the deal with the investment company.
As part of the scheme, he provided copies of what he claimed to be emails from Brookstone principals that falsely represented the deal was real. He also blamed regulators, including the Internal Revenue Service and the U.S. Securities and Exchange Commission, for delays when asked about the deal.
In reality, investigators said the paper company did not hold any significant assets, didn't have any paid employees and never generated any income.
Many of Jackson's victims were from Central Pennsylvania.
In his personal life, investigators said the bankruptcy petitions filed by Jackson contained false information regarding his income, assets and employment. Jackson filed the petitions in order to postpone multiple sheriff's sales on his Derry Township home.
He filed the last two petitions on June 3, 2015 and Jan. 19, 2017 under his wife's name after the court barred him from filing any further petitions under his own name for two years on May 28, 2015.
Jackson's attorneys were not immediately available for comment on the outcome of the case.