Former Traficant aide pleads guilty to bank fraud

Staff report

AKRON

A former Youngstown lawyer and aide to U.S. Rep. James A. Traficant Jr. has pleaded guilty to bank fraud and will be sentenced in May.

R. Allen Sinclair, 51, of Suwanee, Ga., who pleaded guilty Wednesday in federal court, was an aide to the congressman from 1998 to 2000 and resigned from Ohio law practice in March 2012.

Sinclair’s sentencing hearing is scheduled to start at 9 a.m. May 10 and 11 before U.S. District Court Judge Sara Lioi.

That hearing is scheduled over two days because the amount of loss is in dispute; and the government expects to present several hours of testimony on that issue, which is related to the sentencing guidelines, explained Robert J. Patton, an assistant U.S. attorney prosecuting the case.

Sinclair’s plea agreement says he’ll make immediate court-ordered restitution but doesn’t specify the amount.

As owner and operator of Newport Investments LLC and Newport Development Inc. in Youngstown, Sinclair solicited money from investors, promising them annual returns of about 10 percent and telling them their funds would be used to acquire and renovate Youngstown properties.

Five investors invested a total of about $147,000, the indictment said.

Sinclair knew the properties needed little or no renovation and converted the money to his personal use, the indictment said.

Beginning in 2005, Sinclair acquired the 12 homes in Youngstown, Struthers, Austintown and Canfield through land trusts he created for each property.

Sinclair fraudulently misled the sellers into believing the land trusts had assumed the mortgage payments, the U.S. attorney said.

After making minimum monthly payments, Sinclair stopped paying the mortgages without notifying the sellers, who were unaware they were still obligated to the loans, according to the indictment.

As a result, the properties went into foreclosure, causing substantial losses to the lenders and the federal agencies that insured them, the indictment said.

The case was investigated by the FBI with assistance from the U.S. Department of Housing and Urban Development and the Ohio Attorney General’s Office.

Sinclair testified against Traficant in the 2002 bribery and racketeering trial in which Traficant was convicted.

Traficant was expelled from Congress, spent seven years in federal prison and died in a farm accident in 2014.