United States Attorney Chuck Rosenberg

CONTACT: DEANNA WARREN
PHONE: (757) 441-6331
FAX: (757) 441-6689

U.K. AND U.S. CITIZENS PLEAD GUILTY TO RUNNING $30 MILLION PONZI SCHEME

NORFOLK, Va. - Howard Welsh, 62, of the United Kingdom and Lee Hope Thrasher, 51, of Virginia Beach, Va., pleaded guilty today to charges of conspiracy, mail fraud, and wire fraud U.S. Attorney Chuck Rosenberg of the Eastern District of Virginia announced today. Sentencing has been set for Feb. 21, 2007.

Welsh faces a maximum term of 20 years in prison, a fine, restitution, forfeiture of approximately $30 million, and up to three years of supervised release. Thrasher faces a maximum term of 15 years in prison, a fine, restitution, forfeiture of approximately $30 million and up to three years of supervised release.

According to court documents, Welsh and Thrasher formed a corporation and induced approximately 900 investors to invest approximately $30 million. The funds were wired to bank accounts controlled by Welsh in the United States, and then wired to other accounts in 13 foreign countries and the United States. In the summer of 2002, Welsh and Thrasher fled the United States. Welsh and Thrasher were arrested by the Metropolitan Police Service in the United Kingdom in November 2004. After an extradition process, they were returned to the United States in July 2006. The United States has recovered approximately $2 million of the proceeds of the Ponzi scheme.

"This was a massive fraud, stunning in both its length and its breadth, engineered by Mr. Welsh and Ms. Thrasher" stated U.S. Attorney Rosenberg. "Given that, we are very pleased with their convictions and with the lengthy prison sentences sure to follow."

The investigation was conducted by the FBI and the Internal Revenue Service, Criminal Investigation Division. The FBI Forfeiture Unit in Norfolk, Va; the FBI Forfeiture Support Group, Washington; and the Metropolitan Police Service, New Scotland Yard, London, England, also provided valuable assistance in the investigation and prosecution of this case. The case is being prosecuted jointly by Assistant U.S. Attorneys Robert J. Seidel Jr., Blair Smith Perez, Joseph DePadilla and Kevin M. Comstock.