CLEVELAND – A federal grand jury has returned a one-count indictment charging Paul Lebo, 40, of North Royalton, Ohio, with wire fraud related to an alleged investment fraud scheme.
According to court documents, from April 2017 to October 2021, the defendant is accused of devising a scheme to defraud approximately 99 victim investors out of more than $800,000.
As part of the scheme, court documents say that the defendant solicited and accepted deposits from victim investors purportedly for deposits on future equity ownership in the defendant’s hedge fund, Paul Kimmins Investments (PKI), LP, as well as for investment into various options trades. However, court records state that the defendant used investor funds for personal expenses and to repay earlier investors.
According to court records, the PKI hedge fund was insolvent, and the defendant took steps to conceal the alleged misuse of investor funds from investors by using shell companies with no legitimate operations or assets, making false statements to victims about the status of their investment, and using funds from his relatives and new investor funds, without permission or authorization, to repay prior victims.
In total, the indictment alleges that the defendant caused approximately $800,124.86 in losses to victim investors, utilized approximately $49,630 in funds from relatives to repay individuals who invested or loaned money to the defendant, and accepted approximately $18,565 from seven different victims for the purported “sale” of the same item that the defendant never delivered.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the defendant’s prior criminal record, if any; the defendant’s role in the offense; and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum; in most cases, it will be less than the maximum.
This case was investigated by the Cleveland Division of the FBI. This case is being prosecuted by Assistant United States Attorney Erica D. Barnhill.