July 19, 2004
AFRICAN AMERICAN COMMUNITIES, BUSINESSMAN PLEADS GUILTY TO
SECURITIES FRAUD CHARGES
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.
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
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