Sentencing Begins For Businessman Who Defrauded Investors Out Of $1 Million
Sentencing began Wednesday in Fayetteville for the Rogers businessman convicted of defrauding investors out of more than $1 million by selling them parts of a fake Bulgarian software company. The defendant’s sentence is not expected to be announced until Friday, according to the U.S. Attorney’s Office in Fort Smith.
The multi-day sentencing hearing comes 10 months after Allen Wichtendahl pleaded guilty on one charge each of mail fraud, securities fraud and money laundering, in exchange for the other 33 charges against him being dropped, court records state.
As part of the plea agreement, Wichtendahl also agreed to relinquish more than $93,000 seized by authorities from his Bank of America and Hancock Bank accounts, according to court documents.
Wichtendahl was arrested in January 2013 following a federal investigation into allegations he bilked investors out of more than $1 million while pretending to sell them parts of a fictional company. The defendant sold parts of the fake company, New Vision Technology, for as much as $40,000 per “part” to investment fraud victims while telling them the supposed computer software company was selling Amway products in Bulgaria, the plea agreement states.
Court documents state Wichtendahl told victims they would “get rich” from investments. Instead, they lost all of their money while the defendant used the money on luxury cars, an apartment, a second home, furniture, diamond jewelry, a wedding and reception, child support payments, dental bills and upscale clothes, records state.
Wichtendahl began the scheme in the mid-1990s and continued it after moving from Pensacola, Florida to Rogers in 2009. He set up an office address on Stoney Brook Road in Rogers and deposited $877,521 in investor money into a Bank of America account in Springdale after moving to Arkansas, records state.
Court documents state the fraud defendant hosted investors at the office and had victims mail money to the address. He also composed monthly investor reports for investors.
Federal authorities raided Wichtendahl’s office in Rogers in May 2012 while investigating fraudulent securities sales. Within a week, the defendant sent an email to investors telling them to continue sending payments to him, according to court documents.
A warrant was issued for Wichtendahl’s arrest in January 2013. He was arrested three days later and pleaded guilty in the case nine months later.