In May 2013, the FBI’s Atlanta Division received an allegation of fraud against an Atlanta-area businessman and the woman he had hired to manage his business finances. An investor who partnered with the pair claimed that the millions of dollars he had contributed to their business ventures was never properly invested, and he suspected that some of it had ended up in the pockets of his two associates.
The FBI, joining forces with investigators from the Internal Revenue Service, opened a case and began looking into the allegation against businessman Franklin Trell and his financial manager, Cynthia Vinson.
According to Atlanta FBI case agent William Cromer, Trell had quite an interesting history in the business world. “This wasn’t the first time he had been accused of fraud—Trell had been named in several previous lawsuits alleging fraud and other sorts of financial misconduct in his business dealings,” Cromer explained. “And the stories behind the lawsuits were strikingly similar to the current allegation—wealthy investors solicited by Trell to serve as silent partners in his business ventures ended up losing everything.”
Cromer said that Trell always blamed the failures of his businesses—and his inability to pay back his investors—on a variety of circumstances beyond his control. “But in reality,” he added, “investors lost their money mostly because Trell wasn’t investing his share of the funding needed for the new business ventures, and because some of the ‘businesses’ he claimed to be creating were only shells.”
Shell companies are often used by fraudsters to help themselves to money that isn’t theirs. These companies aren’t real—they have no assets and no viable business activities. They exist only on paper and are often a front for criminal activity like tax evasion and money laundering.
FBI and IRS investigators learned that from 2006 to 2013, Trell’s most recent scheme worked like this:
Trell entered into an agreement with a wealthy investor to develop medical software and medical imaging businesses, with the understanding that he and the investor would each contribute a significant amount of capital to these ventures. The only problem was that Trell had no intention of investing any of his own money—so the legitimate businesses failed, and, of course, the shell companies never even got off the ground.