TARGETING AFRICAN AMERICAN COMMUNITIES, BUSINESSMAN PLEADS GUILTY TO SECURITIES FRAUD CHARGES

Attorney General J. Joseph Curran, Jr. announced today the guilty plea of John St. Augustine McDonald to 15 counts of securities fraud, one count of acting as an unregistered securities broker-dealer and one count of selling unregistered securities. McDonald was indicted by the Montgomery County Grand Jury on January 29, 2004 on 47 counts of felony theft, embezzlement and securities fraud. McDonald, now 26 years old, was found guilty in connection with his ownership and operation of fraudulent business enterprises named after the Potomac, Maryland street he was raised on, Thornapple Capital and Thornapple Sisters. In 1999 he convinced members of the African-American community to give him thousands of dollars to be invested in stocks he was offering. Many of the victims were pulled into the scheme upon meeting McDonald in church. McDonald was finally arrested by the Warrant Apprehension Unit of the Boston Police Department in Massachusetts in 2004.

McDonald pled guilty before the Honorable William J. Rowan in the Circuit Court for Montgomery County on Friday July 16, 2004. At that hearing, McDonald admitted to taking money from investors and telling them that their money would be invested into certain securities. McDonald, however, did not properly invest their money. Instead he used much of the investors’ money to accommodate his way of living. The money went toward limousine rides, food delivery, personal bills, and toward other members of his family. The investors were not made aware of this until after the money was spent. McDonald’s illegal action was stopped by the Securities Commissioner of Maryland prior to the case being referred for criminal prosecution.

McDonald is set to be sentenced on October 18, 2004 before Judge Rowan. He is exposed to a period of incarceration (not yet announced) to be followed by a period of probation during which he is to pay back over $109,000 in restitution to the victims. The case was opened by the Securities Division of the Office of the Attorney General and investigated by the Maryland State Police. It was prosecuted by the Office of the Attorney General, Criminal Investigations Division.

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