CONCORD #x2014; A former Exeter businessman and ex-high school hockey coach accused of financial fraud has pleaded guilty to federal charges and will be sentenced in February.
Frederick V. McMenimen, III, 53, of Bow, entered guilty pleas in US District Court in Concord to one count of mail fraud, one count of money laundering and three counts of federal income tax evasion, US Attorney John P. Kacavas announced this week.
McMenimen was an assistant hockey coach at Exeter High School for 17 years and one of the original founders of The Rinks at Exeter. He also made headlines in 2005 when he won a $1.4 million cash jackpot in Megabucks.
In the federal case, prosecutors said McMenimen admitted that from approximately September 2008 to about October 2011 he fraudulently solicited more than $1 million in purported investments from some of his financial advisory clients.
Each of the clients was an elderly widow whose family had long-standing personal relationships with McMenimen#x2019;s family.
McMenimen advised each client to liquidate existing annuities or other investments, to deposit the proceeds in their checking accounts and to then write checks payable to #x201c;PSB,#x201d; according to prosecutors.
In most instances, McMenimen got the clients to write those checks by falsely leading them to believe that PSB was another
investment vehicle that was better for them than their existing annuities, prosecutors said.
However, prosecutors said, PSB was a shorthand reference to a defunct retail sporting goods business, PSB Sports LLC that McMenimen had once owned and operated.
Between approximately Sept. 8, 2008, and October 2011, prosecutors said, McMenimen fraudulently induced the clients to write 23 checks payable to PSB, amounting to an estimated $1.3 million.
McMenimen deposited the checks into a bank account he maintained in the name of PSB. He then used those funds to purchase official bank checks which he directly or indirectly deposited into a checking account maintained in a relative#x2019;s name at an FDIC-insured financial institution.
According to prosecutors, the relative in whose name the account was maintained provided McMenimen with several books of pre-signed but otherwise blank checks, thereby affording McMenimen complete access to the fraudulently obtained funds.
Despite expending all of the proceeds on personal expenses, McMenimen did not record any of the fraudulently obtained funds as income on the tax returns he filed for tax years 2008, 2009 and 2010, prosecutors said.
Because McMenimen underreported his income for those tax years, his tax returns reflected a tax due and owing that was substantially less than his true tax liability.
McMenimen is scheduled to be sentenced on Feb. 11.
Assistant US Attorney Bill Morse prosecuted the case, which was investigated by the Bedford field of the Federal Bureau of Investigation, the Portsmouth field office of the IRS#x2019;s Criminal Investigation Division and the Department of Education.