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story.lead_photo.caption Darrell Rosen

FAYETTEVILLE -- A Rogers man who bilked 13 investors out of more than $1.4 million in a dog business scam was sentenced Monday in federal court to more than five years in prison and ordered to pay restitution.

Darrell Fred Rosen, 59, a business coach, consultant and former executive, earlier pleaded guilty to one count of money laundering and one count of filing a false income tax return. The guilty pleas were part of an agreement with federal prosecutors.

Sentencing guidelines

The standards for determining the punishment a person convicted of a crime should receive, based on the nature of the crime and the offender’s criminal history. In short, it’s the set of rules and principles a trial court judge follows to decide about the sentence to be given to a defendant. The sentencing guidelines are laid down by the United States Sentencing Commission. The main object behind sentencing guidelines is to ensure consistency of sentencing in all courts in United States.

Source: uslegal.com

Rosen was sentenced to 63 months on the money laundering charge to be followed by three years supervised release and three years on the tax charge to be followed by one year of supervised release. The terms will run concurrently. Rosen is to self-report to prison Aug. 20.

Rosen also was ordered to pay $1.4 million restitution and another $439,050 to the IRS. Fines were waived to allow more restitution to be paid.

"You are a con man," U.S. District Judge Timothy Brooks told Rosen. "I don't know if that makes you feel bad, but you are a con man."

Brooks also told Rosen that given the nature of his offenses -- stealing life savings from trusting friends and lying repeatedly -- he wished he could give Rosen more time than federal sentencing guidelines call for.

"Your guideline range is grossly understated," Brooks said.

Before he was formally sentenced, Rosen issued a rambling, sometimes tearful apology to some of the victims who were in the courtroom and asked for their forgiveness.

"I violated the basic bond between friends. I want the opportunity to make it right," Rosen said. "I am determined to try and pay it back. I will work hard to repay the people I have hurt."

Rosen, who has a master's degree in ethics, had asked Monday for a downward departure in the sentencing to two years in prison, arguing he suffers from a bi-polar disorder and his reduced mental capacity somehow contributed to his conduct.

"It kept striking me, why? Why would I do this," Rosen told the judge. "I just cannot believe I've gotten myself where I am today."

Brooks rejected the argument.

Ten other related counts in the indictment, including wire fraud, were dismissed as part of the deal, but evidence of those wrongs was used at sentencing and in determining the restitution Rosen was ordered to pay.

Rosen, a former Procter & Gamble executive over the Iams Division, owned dog care businesses Rover Oaks and Mountain Creek Kennels. He also has experience training and selling hunting dogs, according to his indictment.

Rosen used that experience from 2010 to 2014 to trick people in Arkansas and Texas to invest in an unidentified "dog business" for training and selling dogs to government agencies and private companies, including the Central Intelligence Agency, according to the plea agreement. Rosen used false contract documents claiming to show those buyers were interested and promised generous returns on investment "as well as many other false representations."

Rosen used the money for personal expenses, according to court documents. He filed a federal tax return in 2013 and didn't include the money he took from investors.

The indictment doesn't identify investors, saying only "H.A." gave $100,000 to Rosen and "E.B." gave $105,000. It says Rosen used $161,000 to purchase cashier's checks payable to himself and three others.

Rosen worked for Procter & Gamble for almost 30 years, including a stint as business development executive at locations including Bentonville, until he retired in 2014. He spent time as president and chief operating officer at consulting company 8th & Walton and was the same at Optimus Training & Development in Fayetteville, which offers business coaching for individuals and companies.

Rosen filed for Chapter 7 bankruptcy in late 2014 claiming almost $3 million in liabilities, but he later waived his right to resolve at least some of his debts through the bankruptcy.

A court-appointed trustee -- who typically combs through someone's assets and debts after a bankruptcy filing to make sure both are accurate and then oversees the payment of the debts -- claimed Rosen transferred about $330,000 to two business associates to hide the money shortly before he filed for bankruptcy, according to a 2015 complaint.

An acting U.S. trustee for the region earlier that year said Rosen shouldn't be able to discharge his debt because he "removed, transferred or concealed property of the estate" and hadn't fully explained why he withdrew $630,000 in the year prior to filing for bankruptcy.

Two men, J.R. Arnold and Henry Abel, sued Rosen in Arkansas circuit courts in 2014 claiming Rosen fraudulently convinced them to invest a combined $872,000 in a German shepherd-training business. Both cases were allowed to proceed despite Rosen's bankruptcy filing with the bankruptcy court's permission, and the pair won judgments ordering Rosen to pay back the full amount.

NW News on 07/17/2018

Print Headline: Rosen sentenced to federal prison for scamming investors

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