Sonoma Man Sentenced for Defrauding Investors

A Sonoma man was sentenced in federal district court in San Francisco Thursday to 37 months in prison for defrauding investors in his book-selling business.

Michael Thomas Hamilton, also known as Thomas Smith, was indicted by a federal grand jury in November 2013 on 22 counts of mail fraud, wire fraud and money laundering. He pleaded guilty to two counts of wire fraud on May 18, U.S. Attorney Melinda Haag said.

Hamilton, who owned and operated Small Leaf, a book-selling business, solicited investors through Craigslist and other means between February 2011 and October 2013, Haag said.

Hamilton falsely claimed investors would earn high rates of return from book sales to Amazon and other platforms and would be reimbursed with 10 percent interest if they did not recoup their investment by a certain date, Haag said.

Hamilton also claimed Small Leaf generated $1 million in revenue annually but its earnings actually were minimal, Haag said.

To convince investors their investment was profitable, Hamilton made periodic payments to investors, which he claimed were royalties from book sales through Amazon, Haag said.

Most of the payments, however, were money from new investors or additional investments by existing investors, Haag said. By October 2013, Hamilton solicited approximately $1.6 million from more than 20 investors in California, Oregon and Massachusetts, according to the plea agreement.

Judge William H. Orrick also sentenced Hamilton to three years supervised release and ordered him to pay $426,911 in restitution, Haag said.

Hamilton was released on $75,000 bond and will begin serving his term on Jan. 30.

--Bay City News