La Crescenta Man Sentenced To 9 Years Prison For Federal Fraud

MONTROSE-LA CRESCENTA, CA – A La Crescenta man was sentenced to nine years in federal prison Monday after pleading guilty to federal fraud charges stemming from two schemes: one that bilked a string of payroll companies, and a second involving fraudulent bills sent to entities ranging from small businesses to local school districts that never received any services.

David William Bell was given the 108-month term by U.S. District Judge Virginia A. Phillips, who also ordered him to pay just over $1 million in restitution to payroll companies, hundreds of small businesses and other entities, according to the U.S. Attorney's Office.

Bell pleaded guilty in August in downtown Los Angeles to one federal count each of wire fraud and mail fraud.

The 55-year-old defendant ran a company called UST Development Inc. – which operated in Ontario and Pomona under a string of names, including US Telecom – that he used to defraud a host of victims through two separate schemes, prosecutors said. Bell used different titles while at UST, including president, director and CEO.

In the first scheme, which ran from 2008 through 2010, Bell convinced a series of third-party payroll companies to fund UST's payroll – and then failed to reimburse the companies for paying himself and his employees, according to the U.S. Attorney's Office. In some cases, Bell sent checks to the payroll companies from accounts that did not have sufficient funds to cover the checks.

Over the two-year period, Bell retained or attempted to retain companies that included Paychex, Ceridian and Automated Data Processing, according to his plea agreement. Prosecutors said that in a few instances, Bell repaid a fraction of what UST received from the payroll companies.

"After filing for bankruptcy, and changing his company name, he started a new scheme," according to a sentencing memorandum.

In the second scheme, which related to the mail fraud charge, Bell and his employees sent out mailers that fraudulently appeared to be bills to thousands of small businesses and other entities, most of which were located across Southern California. The mailers – which were sent through the end of 2011 and used words like "invoice," "statement" and "past due" – informed recipients that they owed UST $175 or $350 for "Telecom Maintenance/Service Call."

Many victims paid UST based on the fraudulent claims, when in reality they did not owe UST any money.

Bell "is a fraudster, a trickster. He deceives people into giving him money or services. He has done this for a long time," according to the sentencing memorandum.

City News Service and Patch staffer Emily Holland contributed to this post; Image via Shutterstock