Danville man charged in $17 million fraud scheme

Defendant allegedly stole from beneficiary trust accounts

A Danville resident has been charged with bilking $17 million from at least 10 people by transferring money from their trust accounts for his personal use.

On Wednesday, a federal grand jury in San Jose indicted Leo Joshua Kennedy, 60, on 10 counts of wire fraud, according to a release from United States Attorney Melinda Haag.

According to the indictment, Kennedy stole the $17 million from beneficiary trust accounts while working as an accountant at Backhouse Fiduciary Services in San Jose. The indictment said Kennedy used the funds to make his own personal investments and for living expenses.

Kennedy is scheduled to make his initial appearance in federal court in San Jose on Nov. 20 before Magistrate Judge Grewal.

If convicted on all counts, Kennedy could face up to 20 years in prison on each count of wire fraud and be fined $250,000 -- or twice his profit or loss -- plus restitution.

The indictment is part of efforts by President Obama's Financial Fraud Enforcement Task Force, which was created in November 2009 to investigate and prosecute financial crimes.

More than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners are part of the task force; Haag's office said it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.

Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.


 +   Like this comment
Posted by Bill
a resident of Danville
on Nov 2, 2012 at 6:22 am

What kind of delusional thinking do these people have? Audits will happen and they will get caught. I guess greed trumps insight and denial rules!

 +   Like this comment
Posted by buszmom
a resident of Danville
on Nov 3, 2012 at 10:28 pm

at Bill -- sadly this town is full of arrogance....

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