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Indianapolis man sentenced to four years in prison on federal fraud charges

December 20, 2017

An Indianapolis man has been sentenced to four years in prison after a jury found him guilty of fraud and money laundering.

James D. Victery, 58 was sentenced on Monday on four separate charges: two counts each of wire fraud and money laundering. Sentencing took place in U.S. District Court in Indianapolis before Judge Michael Reagan. 

Victery must also make restitution of $404,000 and serve three years of supervised release after he has served his time in prison.

According to federal prosecutors, Victery committed the fraud through a company he formed in 2007 called Tripartite Escrow Agreement Management, or TEAM. Victery represented TEAM as a company that could provide bonds, loans and escrow services to government contractors.

The victim in the case was an Iowa company, FedSTAR Capital LLC. FedSTAR is what’s known as a factoring agent—a company that purchases invoices at a discount from government contractors. In such an arrangement, the contractor essentially gets paid up front by the factoring agent, and the factoring agent gets its money later when the government payment comes through.

In December 2013 prosecutors say, Victery sold FedSTAR two invoices. Both invoices were purportedly for contracts with the U.S. Air Force: one in the amount of $320,124 and the other in the amount of $334,390.

FedSTAR paid TEAM 90 percent of the face value of the invoices—nearly $600,000 total—with the expectation that FedSTAR would receive the full value of the invoices when the Air Force payment came through.

But the invoices were fraudulent, prosecutors said, and FedSTAR never received payment. 

At the time, Victery and TEAM were in “significant financial distress,” court documents say, and Victery used the money from FedSTAR to pay business expenses and debt.

Victery is to turn himself in no sooner than March 12 to begin his sentence.
 

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