FAYETTEVILLE -- A Rogers man who bilked investors out of as much as $1 million in a dog business scam pleaded guilty Friday in federal court.
Darrell Fred Rosen, 59, a business coach and consultant, pleaded guilty to one count of money laundering and one count of filing a false income tax return. The guilty pleas are part of an agreement with federal prosecutors.
Presentence investigation report
A report prepared by a court’s probation officer on request by the court. It is the report of the investigation conducted to find out the history including the educational, criminal, family and social background of a person convicted of a crime. It summarizes for a court the background information needed to determine the appropriate sentence.
Source: uslegal.com
Ten other related counts in the indictment, including wire fraud, are expected to be dismissed as part of the deal, but evidence of those wrongs can be used at sentencing and in determining the amount of restitution Rosen will be required to pay.
Losses are estimated to be between $500,000 and $1 million and will be determined by the court. There could be a money judgment in lieu of forfeiting illicitly obtained property.
Rosen, a former Procter & Gamble executive over the Iams division, owned dog care businesses Rover Oaks and Mountain Creek Kennels. He also has experience training and selling hunting dogs, according to the indictment.
Rosen used that experience from 2010 to 2014 to trick people in Arkansas and Texas to invest in an unidentified "dog business" for training and selling dogs to government agencies and private companies, including the Central Intelligence Agency, according to the plea agreement. Rosen used false contract documents claiming to show those buyers were interested and promised generous returns on investment "as well as many other false representations."
Rosen used the money for personal expenses, according to court documents. He filed a federal tax return in 2013 and did not include the money he took from investors.
Rosen faces a maximum of 13 years in prison and fines of up to $350,000, or both, on the two charges.
Sentencing is expected after a presentence investigation, which could take up to four months given the complexity of the case, according to U.S. District Judge Timothy Brooks.
Rosen is free on $10,000 bond until his sentencing hearing. He can't leave Benton, Madison and Washington counties without permission and can't have guns or be around them. Rosen is an avid hunter, the judge noted.
The indictment doesn't identify investors, saying only "H.A." gave $100,000 to Rosen and "E.B." gave $105,000. It says Rosen used $161,000 to purchase cashier's checks payable to himself and three others.
Rosen worked for Procter & Gamble for almost 30 years, including a stint as business development executive at locations including Bentonville, until he retired in 2014. He spent time as president and chief operating officer at consulting company 8th & Walton and was until recently the same at Optimus Training & Development in Fayetteville, which offers business coaching for individuals and companies.
Rosen filed for Chapter 7 bankruptcy in late 2014 claiming almost $3 million in liabilities, but he later waived his right to resolve at least some of his debts through the bankruptcy.
A court-appointed trustee -- who typically combs through someone's assets and debts after a bankruptcy filing to make sure both are accurate and then oversees the payment of the debts -- claimed Rosen transferred about $330,000 to two business associates to hide the money shortly before he filed for bankruptcy, according to a 2015 complaint.
An acting U.S. trustee for the region earlier that year said Rosen shouldn't be able to discharge his debt because he "removed, transferred or concealed property of the estate" and hadn't fully explained why he withdrew $630,000 in the year prior to filing for bankruptcy.
Two men, J.R. Arnold and Henry Abel, sued Rosen in Arkansas circuit courts in 2014 claiming Rosen fraudulently convinced them to invest a combined $872,000 in a German shepherd-training business. Both cases were allowed to proceed despite Rosen's bankruptcy filing with the bankruptcy court's permission, and the pair won judgments ordering Rosen to pay back the full amount.
NW News on 01/06/2018