A 52-year-old Anaheim man was found guilty by a Los Angeles federal court jury Thursday on charges of mail fraud and use of fictitious names in connection with a nationwide phony billing scheme.
The conviction of James Dean McCollum Sr. on six felony counts came just one month after he was charged in Los Angeles Superior Court with taking part in the theft of more than $2 million from bank accounts of the Fund for Higher Education, a philanthropic organization that raises money from major corporations to provide grants to colleges across the country and in Israel.
According to Assistant U.S. Atty. David Katz, who prosecuted the federal case, McCollum helped Delmar R. Swann, 53, of Cypress set up a fictitious business entity for a publication called Energy Report and Industry News.
The prosecutor said that what appeared to be legitimate invoices for advertisements in the publication were sent out to companies throughout the United States. Katz said that, in fact, the advertisements were never published and none of the victimized companies owed any money.
"We are not sure how much money they took in fraudulently," Katz said, "because we were only able to track down about $25,000 of the checks that came in on the false billings. They got away with a lot more than that, we are sure. It could have been $100,000 or more."
According to the indictment, McCollum accomplished his principal role in the scheme, that of "laundering" the victims' checks through an Anaheim bank, by using his son, James D. McCollum Jr., as a middleman to open an account through which checks could be deposited and cash withdrawn.
Three other defendants, including the son, have been convicted and received light sentences in return for cooperating with the government's investigation.
The senior McCollum faces a maximum penalty of 30 years in prison and a $6,000 fine when he appears for sentencing June 24 before Chief U.S. District Judge Manuel Real.
Swann, regarded by authorities as the organizer of the scheme and the subject of extensive investigation by the U.S. Postal Inspection Service for several years, is due to be sentenced June 3. The maximum penalty for his conviction on 10 felony counts is 50 years in prison and a fine of $1,000.