HARRISONBURG — A Harrisonburg man accused of defrauding more than a dozen investors out of at least $1.2 million pleaded guilty Wednesday in U.S. District Court in Harrisonburg.
Paul Souder, 60, pleaded guilty to felony wire fraud and felony mail fraud.
Judge Michael Urbanski has not scheduled a sentencing date. Souder faces up to 40 years in prison.
“Mr. Souder abused the trust of his clients when he stole their hard-earned assets,” U.S. Attorney Timothy J. Heaphy said today. “Instead of investing their money, he paid his own bills and bought new vehicles. He has now been held accountable for his despicable acts of greed. We hope that [Wedneday's] conviction helps Souder’s victims heal and receive restitution.”
From at least June 2007 to October 2013, Souder defrauded at least 18 victims through the issuance of promissory notes, according to a statement of facts filed in court.
“The defendant represented to his clients that he would invest the borrowed money online using his personal trading strategy,” the document states. “Souder promised to pay a return to these investors ranging up to 10 percent per quarter calculated upon a benchmark determined by a moving average of the S&P Index.”
Souder used most of the money for his personal gain, the document states. Souder sent fraudulent financial statements to his clients.
“The defendant pooled the investor's funds into an account under his name and signature control and authority at BB&T,” the document states.
“Souder misrepresented to investors how their funds would be used, namely that such funds would be used in their entirety to trade securities online using the Defendant's unique investment strategy,” the document states. “Instead, Souder converted nearly half of such funds for his own personal use to pay for his personal expenses such as on his home mortgage and for personal vehicles.”
Prosecutors say that in the fall of 2012, the Virginia State Corporation Commission (SCC) approached Souder. The agencyinformed him that his actions violated the Virginia Securities Act and that he should cease his online trading activity immediately. Souder failed to do so.
The U.S. Postal Service investigated Souder's crimes.
Contact Pete DeLea at 574-6278 or email@example.com