LOS ANGELES (CNS) - A Westwood man pleaded guilty Thursday to defrauding victims out of about $5 million by purporting to sell bonds for large-scale construction and other projects.
Tommy Watts, 63, entered his plea in downtown Los Angeles to one count each of money laundering and tax evasion, which together carry a sentence of up to 15 years in federal prison, according to the U.S. Attorney's Office.
U.S. District Judge Maame Ewusi-Mensah Frimpong set sentencing for Sept. 8.
Watts was charged in June with multiple counts of wire fraud, aggravated identity theft, money laundering, tax evasion and willful failure to file tax returns.
From September 2016 to September 2019, he falsely claimed to be experienced in providing surety bonds and other financial guarantees for large- scale projects.
Watts told victims that he would assist them in obtaining financing for their projects via his various companies, including the Sherman Oaks-based Source One Surety LLC, and misrepresented that any such bonds or guarantees were underwritten by well-known companies and banks, and that they were backed by assets in the millions or billions of dollars, according to papers filed in Los Angeles federal court.
But Watts and his companies were not licensed to sell such bonds in California. And his claims about his experience, his clients -- including governments -- his underwriting and his supporting assets were not true.
To make his scheme appear legitimate, Watts hijacked the corporate filings of other companies and created fake employees and accounts for underwriters and banks, according to federal prosecutors.
Watts convinced victims to send his companies about $5.2 million, the majority of which he spent on personal items such as classic and luxury cars, rent for high-end apartments and the purchase of luxury goods.
He also laundered victim payments through accounts held in the names of corporations that were not registered and used fake taxpayer identification numbers -- and then used those accounts to spend victim funds as his own.
He hid this income from the IRS in tax years 2017 and 2018, years in which he failed to file any tax returns.