DAVID B. BARLOW, United States Attorney (No. 13117) ::. !' ,- T n ):71·.,.' 'w j. j

STEWART C. WALZ, Assistant United States Attorney (No. 3374)

PATRICIA PARKINSON GLENN, Assistant United States c

Attorneys for the United States of America L.• I ,'" •• I: Ob

185 South State Street, #300 r , .. 1.) i ',) L;, ( ;,

Salt Lake City, Utah 84111 ;

Telephone: (801) 524-5682 C,(:

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF UTAH, CENTRAL DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

JASON K. V AUGRN,

Defendant.

Case: 2: 12-cr-00219 Assigned To : Kimball, Dale A.

Assign. Date: 04/25/2012

Description: USA v.

INDICTMENT

18 U.S.C.

§2314 (Count 1 Interstate

Transportation ofMoney Obtained

by Fraud):

§ 1343 (Counts 2 and 3 Wire Fraud);

§1957 (Count 4 Money Laundering)

The Grand Jury Charges:

The Defendant and His Business:

At all times relevant to this Indictment:

1. Defendant Jason K. Vaughn ("Defendant Vaughn") was an individual who

took money from investors.

2. Freestyle Holdings, LLC ("Freestyle") was a Utah Limited Liability

Company formed January 12,2005, by Defendant Vaughn. Freestyle received

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investment money from investors who were told that their money was to be invested in

real estate.

The Scheme and Artifice to Defraud

3. On or about January 2006 to on or about September 2007 in the Central

Division ofthe District ofUtah and elsewhere, Defendant Vaughn devised and intended

to devise a scheme and artifice to defraud and for obtaining money by means of false and

fraudulent pretenses, representations, and promises. In execution of the scheme to

defraud, Defendant Vaughn used interstate wire transmissions and the facilities and

means of interstate commerce.

4. It was a part of the scheme and artifice to defraud that beginning around

2006, Defendant Vaughn began accepting money from individuals and companies

through Freestyle with the representation that the money would be given to Founders

Capital to invest in real estate.

5. It was further a part ofthe scheme and artifice to defraud that Defendant

Vaughn told investors that they would eam 3% interest per month on their investments.

6. It was further a part of the scheme and artifice to defraud that Defendant

Vaughn told investors that there was little risk with their investments because their

investments were secured by real estate.

7. It was further a part of the scheme and artifice to defraud that Defendant

Vaughn knew the above representations were false, or, made these representations false

by taking substantial amounts of the money invested and using it for purposes other than

investing in real estate. Furthermore, the investment money placed with Freestyle was

not secured or collateralized by real estate.

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8. It was further a part of the scheme and artifice to defraud that Defendant

Vaughn used investors' money for purposes not disclosed to investors and potential

investors, such as for Defendant Vaughns' personal expenses, life insurance premiums,

and interest payments to other investors.

9. It was further a part of the scheme and artifice to defraud that on or about

January 17,2008, Defendant Vaughn falsely told the Utah Division of Securities that he

never explicitly told investors with Freestyle that their money was going to Founders

Capital.

10. It was further a part of the scheme and artifice to defraud that in order to

convince earlier investors that their funds were earning money and to convince potential

investors that the program was working and earning money, Defendant Vaughn operated

Freestyle as a "ponzi scheme". That is, Defendant Vaughn used money placed with

Freestyle to make interest payments to earlier investors. In this way, Defendant Vaughn

created the false impression that Freestyle was profitable, that the investments were safe,

secure, and that interest was being paid.

Count 1 18 U.S.C. §2314

(Interstate Transportation of Money Obtained by Fraud)

11. The allegations of the Scheme and Artifice to Defraud are incorporated by

this reference as though fully set forth herein.

12. On or about April 26, 2007, in the Central Division of the District ofUtah,

JASON K. VAUGHN

Defendant, did transport, transmit, and transfer, and cause to be transported, transmitted,

and transferred, in interstate commerce, between Utah and Wyoming, $175,000, knowing

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the same to have been taken by fraud through the scheme and artifice to defraud detailed

in this Indictment; all in violation of 18 U.S.C. §§ 2314 and 2(b).

Counts 2 and 3 18 U.S.C. § 1343

(Wire Fraud)

13. The allegations of the Scheme and Artifice to Defraud are incorporated by

this reference as though fully set forth herein.

14. On or about the dates listed below, in the Central Division of the District

of Utah,

JASONK. VAUGHN

Defendant, having devised and intended to devise a scheme and artifice to defraud, and

for obtaining money and property by means of false and fraudulent pretenses,

representations, and promises, for the purpose of executing said scheme and artifice to

defraud, did cause to be transmitted by means ofwire communication in interstate

commerce certain writings, signs, and signals, each such use of wire communication

being a separate count ofthis Indictment; all in violation of 18 U.S. C. §§ 1343, 1349 and

§ 2(b).

COUNT DATE INTERSTATE USE OF WIRES

DESCRIPTION

2 May 8, 2007 $200,000 Wire

Transfer from US

Bank in Portland, OR,

to JP Morgan Chase

Bank in Provo, UT

AC.'s investment to Freestyle

3 June 29, 2007 $50,000 Wire Transfer

from American First

Credit Union to JP

Morgan Chase Bank

R.G.'s investment to Freestyle

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Count 4 18 U.S.C. §1957

(Money Laundering)

15. On or about July 19,2007, in the Central Division of the District of Utah

and elsewhere,

JASONK. VAUGHN

Defendant, knowingly engaged in and did cause a monetary transaction in criminally

derived property of a value greater than $10,000 that was derived from the specified

unlawful activity of Wire Fraud as alleged in Count 3, in that the Defendant caused

. $15,418.00 to be given to Home Advantage LC; all in violation of 18 U.S.C. §§ 1957 and

2(b).

A TRUE BILL

FOREPERSON OF THE GRAND WRY

DAVID B. BARLOW

Attorney for the United States

PARKINSON GLENN

Assistant United States Attorney

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