A former bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints in Trumbull received a prison sentence of 46 months, followed by three years’ supervised released, on Thursday for defrauding members of his congregation and others, federal officials says.
The former bishop, Julius C. Blackwelder, 59, formerly of Stratford, was sentenced by Senior U.S. District Judge Ellen Bree Burns in New Haven. In February, Blackwelder pleaded guilty to one count of wire fraud and one count of money laundering.
A press release from the U.S. Attorney’s Office in Connecticut gave this account:
… beginning in 2005, Blackwelder persuaded individuals to invest their money with him as part of an investment pool known as the “Friend’s Investment Group.” At the time, Blackwelder was the bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints located in Trumbull, and he solicited investments from, among others, members of his congregation.
Blackwelder misrepresented to investors that he would invest their money in safe, long-term commodities futures contracts, and that he was an experienced and successful commodities investor. In some instances, Blackwelder guaranteed investors’ principal and a specific return on their investment. He documented his misrepresentations to investors in promissory notes, offering memoranda and account updates that he prepared.
In fact, Blackwelder used investors’ money to fund his construction of a 7,000 square-foot home on the Housatonic River in Stratford, to pay other personal expenses and to repay personal bank loans, including a line of credit from a Troubled Asset Relief Program (TARP) recipient bank. Blackwelder also used some invested funds to pay earlier investors.
Through this scheme, Blackwelder defrauded investors of nearly $500,000.
One victim of Blackwelder’s scheme, who was nearing retirement, took out a $100,000 home equity loan on his house and withdrew $130,000 from his 401k to invest with Blackwelder.
“This defendant exploited his position in his church to mislead other church members into believing he was an accomplished investor who could help them protect and increase their wealth,” stated Acting U.S. Attorney [Deirdre M.] Daly. “Instead, he used much of the money he took from his victims to construct a luxurious waterfront mansion so that he could live in comfort while his victims struggled to make ends meet. “