Joan Black of Maynardville, Tennessee admitted before a judge that in 2007 she began soliciting investors to purchase annuities through her company, Benefit Capital, Inc. Part of her solicitation consisted of promising the investors that an insurance company in Galveston, Texas guaranteed to pay an annual interest rate of 10% on the annuities. In reality, Ms. Black created fake portfolios by printing the name and logo of the Galveston insurance company at a print shop in Knoxville. The insurance company had no knowledge that their name and logo were being fraudulently used.
Within one year, she was paid over $673,500 by at least five different investors. Instead of investing those funds, Joan deposited that money into her bank account for her own personal use. Her activity was discovered after an investigation was conducted by both the U.S. Postal Inspection Service and the IRS Criminal Investigation. Her sentencing has been set for January 2012.
Pursuant to 18 U.S.C. § 513(a), a person who "makes, utters or possess a counterfeited security of a state or a political subdivision thereof or of an organization, or whoever makes, utters, or possesses a forged security of a state or political subdivision thereof or of an organization, with intent to deceive another person, organization, or government" can be found guilty of possession of counterfeit securities. If a person is found to be guilty of such a crime, they can either be fined, imprisoned up to 10 years, or both.
Under subsection (b) of the same United States Code, a person can also be fined and/or imprisoned up to 10 years if they have either made, received, possessed, sold, or "otherwise transfer[red] an implement designed for or particularly suited for making a counterfeit or forged security with the intent that it be so used."