CEDAR RAPIDS – An Iowa man who defrauded investors through his company, Virtual Vision, Inc., pled guilty today in federal court in Cedar Rapids.
Jeffrey J. Kinseth, age 58, from Cedar Rapids, Iowa, was convicted of one count of wire fraud.
In a plea agreement, Kinseth admitted he was the president and principal shareholder of Virtual Vision, Inc. Kinseth admitted that, between March 2008 and September 2009, he solicited and accepted hundreds of thousands of dollars from at least eleven individual investors. Kinseth admitted falsely telling the investors all of their money would be invested through Virtual Vision as a purported pooled investment vehicle. Kinseth admitted he told the investors this, knowing he would, at least at times, fail to invest all of the investors’ money and use some of the money to make payments to earlier investors and for other purposes. Kinseth also admitted that, of the investor funds actually traded, he consistently sustained losses. Kinseth admitted fraudulently concealing his misappropriation and trading losses by creating and issuing false account statements to investors that falsely reflected purported profits from their trading.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Kinseth remains free on bond pending sentencing. Kinseth faces a possible maximum sentence of twenty years’ imprisonment, a fine equal to the greater of twice the gross gain or loss resulting from the offense, or $250,000, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Peter Deegan and was investigated by the Federal Bureau of Investigation in cooperation with the Commodity Futures Trading Commission and the Office of the United States Trustee.