UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17551 / June 10, 2002
United States v. Johann M. Smith, No. 1:00CR00094-001 (S.D. IN);
United States v. Constance Brooks-Kiefer, No. 1:00CR00093-001 (S.D. IN)
The U.S. Securities and Exchange Commission (SEC) announced today that on May 24, the Honorable John D. Tinder, United States District Judge for the Southern District of Indiana, sentenced Johann M. Smith (Smith) and Constance Brooks-Kiefer (Brooks-Kiefer), both residents of Indianapolis, Indiana, for their involvement in a $29 million Ponzi scheme. Judge Tinder sentenced Smith to three years and one month in prison and ordered him to pay $11.7 million in restitution. Judge Tinder sentenced Brooks-Kiefer to six months of home detention and imposed a fine of $3,000. Smith, founder of JMS Investment Group, LLC (JMS) and former attorney for Heartland Financial Services, Inc. (Heartland), previously pled guilty to two counts of mail fraud and one count of unlawfully structuring currency transactions. Brooks-Kiefer, former administrative assistant of Heartland, pled guilty to one count of unlawfully structuring currency transactions. Judge Tinder previously sentenced two other defendants: Kenneth R. Payne (Payne) to seventeen years and seven months in prison and Daniel G. Danker (Danker) to 71 months in prison [See Litigation Release Nos. 17049 and 17492]. The criminal case was prosecuted by the U.S. Attorney's Office for the Southern District of Indiana.
Smith, Brooks-Kiefer, Payne and Danker are also defendants in a civil action, SEC v. Payne, et al., filed by the SEC on August 10, 2000, to halt the Ponzi scheme. Judge Tinder, on August 10, 2000, entered a temporary restraining order and asset freeze in that case against Payne, Danker, Heartland, JMS, Smith and Brooks-Kiefer. Judge Tinder entered an order of permanent injunction against Smith on November 16, 2000, and an order of preliminary injunction against Brooks-Kiefer on August 21, 2000. This litigation is ongoing. [For more information concerning the SEC's action, see Litigation Release Nos. 16650 and 17049].